A 2017 consumer expenditure report by the U.S. Bureau of Labor Statistics revealed that the annual cost of owning and operating a vehicle is $9,576, according to Investopedia. Owning a business car is a smart investment if your venture requires you to deliver large amounts of cargo.
You may also need business cars for commuting if you and your employees do a substantial amount of driving for work rather than personal commitment. But before investing in a vehicle, you need to learn how to pick the right car and determine the right timing.
Determine Your Budget
While there are many things to consider when purchasing company cars, affordability should be on top of the list. You want to be sure that owning one or more vehicles is an expense your business can afford. Keep in mind that buying a car is not a one-time cost. You will need to calculate the initial down payment fee, monthly payments, insurance premiums, and maintenance costs.
In most cases, business owners pay for these expenses out-of-pocket, and that might cause a cash flow problem for a start-up. If you are short of cash, an auto loan might help you. However, if you are having trouble obtaining a loan, leasing is an affordable option, as it does not require a lot of money for a down payment.
Don’t Be Afraid to Shop Around
Whether you intend to buy a new or used vehicle, make sure you are getting competitive pricing that will help you save money. You can accomplish this goal by comparing car prices online based on models, brands, and consumer reviews. When shopping around for business vehicles, consider the features best suited for your daily activities. If, for example, your business requires employees to work outside the office, buying an SUV might be a great option because it is spacious, comfortable, and dependable.
Understand Your Business Needs
To ensure a company vehicle is worth it, determine the reasons your business might need a car. For instance, if your business involves delivering parcels or cargo, buying a car is advisable. You will not only cut the cost of hiring delivery services but also enhance productivity. Also, identifying your transportation needs will help you invest in the right car in terms of size, performance, aesthetics, and costs.
Buying a company car is a symbol of success and a thriving business. But that should not be the sole purpose of investing in one. Consider owning a business vehicle depending on the affordability of a car and the needs of the business. If it will take your business to higher means, go for it.
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