Valuation: What It Means for Asset & Vehicle Finance

Valuation

Valuation is the lender’s (or valuer’s) view of what an asset is worth today — and it directly impacts how much you can borrow, whether you need a deposit, and how fast your approval moves.

In most Low Doc Asset Finance and Vehicle Finance deals, the valuation is based on a recognised market guide, recent comparable sales, condition, usage/hours, age, and the exact spec (variants matter).

If the valuation comes in lower than the purchase price, it can create a valuation shortfall — meaning you either need to reduce the amount borrowed, contribute a deposit, or restructure the deal (sometimes by pairing the purchase with a separate cashflow facility like a Business Line of Credit or Working Capital Loan).

Real-world example: an ABN holder buying a used excavator for $150k might get a lender valuation of $130k due to high hours and older attachments. That doesn’t mean the deal is “dead” — it means the structure needs to match the valuation (e.g., deposit, different lender appetite, or bundling the right supporting docs for speed). If you’re trying to move quickly, start with Check Eligibility so the right pathway is chosen before enquiries multiply.

Who this matters for most: tradies, truckers, medical professionals, and business owners upgrading equipment through Equipment Finance or vehicles through Low Doc Vehicle Finance.

FAQs

What’s the difference between purchase price and valuation?

Purchase price is what you agree to pay. Valuation is what the lender believes the asset is worth for lending purposes. If valuation is lower, you may need a deposit or a different structure (common in Low Doc Asset Finance).

Does a lower valuation mean the deal won’t get approved?

Not necessarily. It usually means the loan-to-value (LVR) needs to change — deposit, different lender appetite, or clearer evidence of condition/spec. If timing is tight, combine the right documents early via Check Eligibility.

What assets typically need a valuation?

Vehicles, machinery, specialised equipment, and some private-sale purchases often require a valuation (or an equivalent lender value check), especially under Equipment Finance and Vehicle Finance.

How can I reduce the chance of a valuation shortfall?

Provide clean details: exact model/spec, photos, hours/kms, service history, and invoice/quote that matches the asset. Avoid “bundle confusion” (extras/attachments) and read the common errors in Equipment Finance Application Mistakes.

Can valuation affect my cashflow options too?

Yes. If the asset valuation caps the loan amount, some businesses top up working capital separately using a Business Line of Credit or Working Capital Loan instead of over-stretching the asset facility.

Next step: if you’re financing a vehicle or equipment purchase and want the cleanest structure first time, Talk to a Broker.