Picking a company vehicle comes with many considerations. Here is how to decide the best company vehicle option for you.
Type of car
The type of car not only will affect practicality, but also the image that the car portrays. If you are looking to purchase a reliable company car, consider SUV’s Saloons and Estates which are the some of the best body types for company vehicles.
When choosing the right car, make sure that not only the size but also the shape is suitable for your business. Depending on the goods that you need to transport and how heavy they are, you may need to choose a certain kind of car or van that can handle the load in an optimal way. Another thing to pay attention to are the doors. How practical are the doors when handling and transporting goods? Choosing a van that is not suitable for the job could potentially even become a safety hazard.
Pricing
Depending on the budget of your business there are a large variety of cars to choose from. With a larger budget you may want to opt for a newer or brand-new vehicle. However, you can also get many used cars that are suitable for business use and company vehicles. Second-hand cars will be much cheaper than buying them brand new. Don’t forget to take fuel costs, taxes and maintenance into consideration. Determining the vehicle lifespan will also help you understand how much the car should cost you.
Buying options
Should you buy outright? Should you lease? Or choose a business contract plan? With all the different options out there, it is often not easy to know which one to choose. A lease offers fixed monthly payments, which can make it easier for start-ups and smaller businesses. However, you will not end up owning your van or fleet, which means that you are not able to resell it.
You will also have to pay more than if you had bought it outright, even though you have the option to choose another model at the end of the term. The cost of a lease is determined by the annual mileage, which could make this an expensive option if you spend a lot of time driving.
On the positive side, leased vehicles often qualify for tax reduction and are typically regarded as a business expense. If you would like a combination of both options, a contract purchase agreement for businesses could benefit you. This is essentially a lease which allows you to purchase the vehicle at the end of the term.
Buying outright
- No restrictions on mileage
- Flexible prices
- Resale value
- Higher costs upfront
- Maintenance costs
- Company car tax
Leasing
- Lower initial investment
- Maintenance is usually included
- Reduced taxes
- Vehicle cannot be purchased at the end of the term
- Mileage restrictions
- No resale value, higher costs overall
Economical
If you plan to use the car for business miles you don’t want to be constantly stopping to fill up. Make sure to look for a car with a good Miles per Gallon.
Type of miles
If you would like to do short round the town trips then a petrol engine will be more efficient, whereas for long distances a diesel engine is more fuel efficient.
Before deciding on a company car, decide whether it is the best option for the intended use. Choosing a car or fleet too quickly could end up costing you a lot of money and potentially have a negative impact on the environment or even become a safety risk. Make sure to take your time and find the perfect vehicle that suits your needs.
