A 2019 Consumer Expenditures report by the U.S. Department of Labor revealed that the average cost of owning and operating a car was $9,576 per year, according to Investopedia. Investing in a business car should be among your top considerations as your trade expands. Not to mention, buying a new automobile for your business comes with many perks, including tax benefits, reduced transportation costs, and improved productivity.
Your company car can also boost your branding campaign if you choose to paint your company name or logo on it. However, how do you determine when the time is right to invest, and which car will best suit your business? Here’s how to avoid common mistakes when investing in a business vehicle.
Time Your Purchase Wisely
The right time to purchase a business car will vary from company to company. For some entrepreneurs, owning an automobile is a symbol of prestige and success. Others need vehicles to complete transactions efficiently. Keep in mind, investing in a vehicle when you don’t need one can drain your company’s cash flow. So, before you can start selecting a car for your small business, ask yourself if your venture needs one. You can also consider leasing a vehicle instead of purchasing it. It all depends on your budget and business goals. If you want to find out more about car leasing, just take your time on doing your research. Can the company afford the cost of maintenance, fuel, and repairs? Also, take into account how often you travel for business purposes. This step will help you determine the right moment to invest.
Know The Type Of Car Your Business Needs
Take time to evaluate why your company requires a car based on daily functions and then decide whether an SUV, truck, or van fits your requirements. For example, if you run a delivery service company or catering business, your preferred vehicle will be a van. In that case, you’ll need to explore consumer ratings on different van models and makes. Understanding the unique qualities of automobiles will help you select a model that offers sufficient space, convenience, and great fuel economy.
Choose Your Buying Options Carefully
Once you’ve identified the ideal business vehicle, consider how you will pay for it. Remember, your purchasing option will depend on the financial health of your company. Therefore, assess your business finances and then set a budget for your company vehicle. Creating a car budget will help you determine whether you should lease, loan, or pay in cash.
Investing in a business vehicle is beneficial, but the process can be tricky. To ensure you make informed choices, you need to determine if your company really needs a car. You must also consider the timing, type of car, and then decide if buying or leasing works best for you.