All businesses have varying needs. These will depend on the industry you are in, the type of offers you have, the kinds of employees you hire, who your customers are, etc. Your expenses, no matter how small, can quickly add up.
Chances are, you are trying to save as much money as you can just to lower your company expenses. This could mean using your own car to run important company errands and using your own personal expenses to pay for the miles.
Signs Your Startup Now Needs a Company Vehicle
More often than not, the last thing on your mind could be buying a company vehicle for your startup. But sometimes, your personal vehicle is no longer enough to accommodate the growing needs of your brand. But how do you know if you should start investing in a company vehicle?
The following signs tell you that your business now needs a vehicle you can use specifically for your brand.
- You often lease vehicles just to make deliveries
- You are having a hard time writing off driving costs
- Your personal car can no longer accommodate your inventories, materials, or deliveries
- You want to make sure your employees get to their destination
There are other reasons why your business could use a company vehicle. For one, you can use the vehicle as part of your corporate branding. This is one good way to extend your branding and introduce your brand to more people in more places.
Some of your employees may also need a car to get to and from their destination. If they are always on the go to meet important clients, have to drive inventories or make deliveries to consumers or drive clients to and from their destination, then a company vehicle becomes a must. You can even enjoy many tax deductions for buying a vehicle meant for business purposes only.
What to Consider Before Making a Company Vehicle Investment
There are many things you need to consider before buying a vehicle for your startup. Some important ones include the following.
Your Startup’s Financial Status
The number one factor you need to consider is the current financial status of the company. You may need a company vehicle but if your business can’t afford one for now, then leasing can be a better idea. But if your company has been around for quite some time now, was able to maintain a positive cash flow, can afford the additional costs of acquiring a company vehicle, and can qualify for a working capital loan for SMEs, for instance, then buying a company vehicle can be a good choice.
Vehicle Consideration
You need to access what kind of vehicle is a good investment for your startup. Do you need a van, truck, or maybe an SUV? How do you plan on using the car and do you plan on transporting people, inventories, raw materials, or products?
Don’t forget about the size, aesthetics, fuel economy, and add-ons. Aside from these, it pays to consider the price range of the vehicle you plan on buying, the estimated resale value, and the maintenance costs. Don’t forget about the car’s insurance costs. You will definitely want your new company vehicle to be insured in case anything happens.
Leasing versus Buying
There are times when leasing is a better idea than buying a company vehicle. This is good if you can’t afford to buy a vehicle, can’t obtain a low-risk loan and your business car needs are on a short-term basis. You can upgrade the company vehicle as frequently as needed and keep up with car maintenance.
If you buy your own company vehicle, you get to choose to use it however you want, giving you full control over the vehicle. You can commit to a model and get the necessary funding along as you have a good credit history. There is no need to worry about a dealer chasing you and you can upgrade the vehicle and invest in additional add-ons to avoid depreciation.
Mistakes When Buying Company Vehicles
Many already made mistakes when buying vehicles for their business. Since your brand is still a startup, you should be more careful so you can avoid costly consequences.
When making a company car purchase, make sure you buy one that can accommodate your business needs. Don’t get too excited to finally buy a vehicle that is big, brand new, and can outperform your competitors. You want to hit your entire checklist, including buying one that is of the right size and type, is within your budget, has a good fuel economy, and the right insurance.
Don’t be afraid to negotiate, be it while applying for a loan to fund the purchase, when shopping for cars in different dealers and when searching for the right insurance. You want to lower your costs as much as possible without putting your finances and new business investment at risk.
These are but some major considerations one needs to keep in mind when buying a company vehicle. Maybe your startup could use a company car, but the does not necessarily mean you should make a decision asap. Take your time and digest everything before you commit.
