Does your company depend on a vehicle for sales routes and delivery services? If the answer is yes, then it’s the perfect time to buy one. Investing in the right automobile can benefit your business in many ways. As a business owner, you can enjoy tax deductibles, increased efficiency, and convenience. Company cars also create a smart way of branding your business. In most cases, small business owners drive branded vehicles to increase recognition; however, to enjoy these benefits, you must consider the cost of car ownership and which automobile meets your business needs. Below are essential factors to consider when investing in a company car.
Affordability
Ideally, the first thing you want to factor in beforehand is whether the organization can afford to purchase a vehicle and maintain it. If your company is ready financially, incorporating automobile expenses shouldn’t be a problem. Nonetheless, you need to prepare a detailed budget for your car purchase.
Remember, the cost of a vehicle entails much more than the buying price. You must think of the insurance rates, registration fees, fuel costs, and maintenance expenses. Understanding the total cost of car ownership will help you select a car your company can afford every month.
Type of Vehicle
The type of automobile you buy will depend a lot on the nature of your business and transportation requirements. For example, if you pick and deliver cargo or transport employees from one place to another, you’ll need a spacious vehicle like a truck or SUV. While you can visit any auto shop and buy the car of your choice, it pays to do some research beforehand.
Spend time online reading expert reviews on different car models. If you travel a lot by road for business reasons, find out which model guarantees the best fuel economy. Also, take into consideration maintenance costs. As you may know, regular maintenance checks are important not only for safety reasons but because they can prolong your car’s life. So be sure to check the brakes, oil, and even the gas in your tank as gas has an expiration date.
Financing Options
Once you have identified the ideal car and the costs, familiarize yourself with different ways to finance your company vehicle. Depending on your company’s finances, you can choose to pay in cash or obtain an auto loan. Opting for cash payment is a practical and a convenient path to owning a business vehicle. However, for a startup, taking a loan is advisable. An auto loan helps prevent cash flow problems often caused by taking out capital from the business when investing in a vehicle. If you’re short on cash and can’t access a loan, leasing might be a suitable option for your small business.
Buying a company vehicle is a critical financial decision. Therefore, before making a purchase determine your business travel needs. Think about how investing in a car affects your company’s cash flow and whether you can enjoy tax deductibles. Also, choose a vehicle that meets your business transportation needs while giving a good impression to your clients and competitors.
