The economy is growing at a steady pace, giving more room for businesses – including small and home businesses – to grow alongside it. The market is evolving too, especially since you are no longer limited to local customers thanks to the internet. Steady growth leads to healthy business expansions and plenty of opportunities.
Aside from expanding the business itself (by adding more team members) a lot of business owners also expand their business-related assets. Getting a company car to support operations is one of the big decisions to make in this climate. Before you make that decision for your business, here are a few important things you need to know.
Consider the Long-Term Costs
The price of a car is only a fraction of its total cost of ownership. There are so many other cost elements to consider, especially when you are buying the car as a business asset. For starters, you have to take into account additional fees and costs associated with buying the car, including interest and administration fees.
Next, take depreciation into consideration. Cars depreciate much faster than other assets for obvious reasons. You have to deduct the decrease in value from your books. There are also maintenance and running costs, including the costs of fuel and insurance.
This may seem like a lot of costs to absorb, but the decision to buy a company car can still be beneficial when you consider the boost in efficiency you get in return. Taking these costs into account actually helps you compare costs and benefits more accurately, leading to a better decision for the business and yourself.
Take Extra Care
Car maintenance is another important part of the equation. Many businesses wait until something goes wrong with the car before servicing it in an attempt to save on maintenance. This may seem like a good idea at first, but the approach will cost your business more – so much more – compared to the amount of money you save.
Regular maintenance is a must. Good car care brings more benefits than you realize. You can prevent things from going wrong in the first place. You can also maintain the car’s efficiency level while keeping it healthy. At the same time, you are saving money on running costs thanks to the better fuel efficiency of a well-maintained car.
Compare Your Options
Let’s not forget that buying a company car is not the only way you can equip your business with operational vehicles. There are other options to consider too. You can, for example, lease the vehicles you need rather than buying them. The initial investments are lower; the long-term risks are lower too.
Renting is another option worth considering. Thanks to the Uber revolution, many service providers now rent out cars and other vehicles at lower rates. As a business, you have more leverage to negotiate a stunning deal on the vehicles you need, particularly on a long-term rental.
These are the important things you need to know before buying a company car for your business. Make sure you take these details into consideration and that you pay attention to the purchase decision while keeping the growth of the business in mind.