If you’re looking to expand your business, you’ve probably thought about getting a company car. Apart from helping get things done, it can be a status symbol and an excellent way to elevate your brand. With over 22 million commercial vehicles produced this past year globally, there are tons of options from which to choose. But before purchasing one, there are some crucial factors to consider since, like any other significant expenditure, a commercial vehicle has its downsides.
So, then, is buying a car for your business worth it? Given the various aspects involved, it’s crucial to consider the pros and cons and then make an informed decision. Here’s a quick run-through of why it may or may not be an excellent investment idea:
What to Consider
Before looking at the advantages and disadvantages, it’s crucial to know what you should ask yourself before purchasing. The most critical question entails its feasibility: is the car worth it to your business at its current stage? Here, consider the entire cost, including maintenance and fuel. Depending on what you’ll want to use the car for, weigh the costs against the returns, then decide. For instance, if you’re looking for great stability, balance, a lot of space, and traction while driving, a heavy-duty truck like a dual-rear-wheel truck( DRW ) would be a smart pick.
Benefits of Having a Company Vehicle
Perhaps the most highly-valued advantage of having a business-owned vehicle is the tax benefits it brings. Your business can enjoy slashed depreciation and general automotive maintenance and functionality expenses, including fuel and repair. If you’ve acquired the car on loan, then you’ll be pleased with the tax-deductible car-loan interests.
Contrary to owning a personal vehicle, there are few to zero consequences as far as personal insurance goes if the car is involved in an accident. A company car may also boost morale for your employees and can be added to the list of their perks. Showing up in a well-branded company vehicle can also impress potential clients and improve your brand’s popularity and eligibility.
The Downside of Purchasing a Company Car
Like any other major purchase, the up-front cost involved in commercial vehicle purchasing is a hefty one. If you’re running a start-up business where you’re a little limited financially, you may find it quite challenging to purchase a company vehicle without a financing plan. Even with a financing plan, the costs may be higher in the form of interests.
A car is also not easy to maintain, primarily if it’s predominantly used to transport large cargo. Paying for repairs and other auto-related costs may weigh heavily on developing and start-up businesses. While there are some advantages, the costs may weigh on your business’s profitability.
Knowledge is key. If you’re in the market for a company car, it’s imperative that you know all there is to know about it. In some cases, there may be some other areas in your business that require your attention, in which case getting a car may not be a priority. In other cases, purchasing a company car may be just what you need to elevate your business. Give such a step significant thought and make a wise decision.