An Edmunds report states that the average buying price for a new vehicle in December 2021 was $46,426, up by 14% from the previous year, according to CNN Business. Many businesses consider buying cars because they symbolize luxury and success. However, that shouldn’t be the only reason for investing in a company vehicle.
Given cars are huge investments, there are several things you must consider, like ways to get a company car and legal issues that revolve around the use of business vehicles. As a business owner, it’s also wise to ask yourself if your company needs a car and whether the timing is right. Below are a few tips that will help you determine when the time is right to buy a car for your business.
Is A Car An Expense Your Business Can Afford?
Before buying a vehicle for your venture, you want to be sure it’s an expense you can afford. Note that the cost of owning a car isn’t the amount you see on the sticker. When you buy a vehicle, you must budget for recurring expenses like fuel, insurance, maintenance and repairs, and the monthly down payment if you choose to take an auto loan to finance your purchase. With this in mind, you need to organize your finances in advance to ensure your investment won’t hurt your company’s cash flow. While an auto loan is an ideal option, avoid it if it will only get you into more debt or if having an automobile isn’t necessary for running your day-to-day business functions.
Does Your Business Need A Vehicle For Its Operations?
Besides affordability, outline the reasons your business needs a vehicle. For some entrepreneurs, having a company vehicle is necessary for daily functions of the business. For example, let’s say you and your employees are always traveling to meet clients, attend conferences, or deliver cargo. Owning a business car boosts convenience and reduces the risk of devaluation of your personal car, and it also prevents costly wear and tear.
Other benefits of investing in company cars include tax breaks, employee retention, and affordable branding. Ideally, you can use your company car to advertise your business. All you need to do is invest in vinyl wraps and print your business name, logo, and contact details. Remember, the cost of wrapping a car with vinyl wraps varies depending on car model, vinyl color, car parts you want to wrap, and installation costs. Installing vinyl car wraps means having another expense that your company has to deal with, but it’s worth it because your brand will be more visible.
Do You Have Trustworthy Employees?
As a business owner, you’re liable for your company cars, so you want to be sure you have trustworthy employees who will drive safely. Additionally, branded company cars driven by your staff reflect the image of your business. So if your employees have a bad driving record and cause an accident, your company’s reputation will be at risk and your insurance rates will increase. Therefore, assess your employees’ conduct on the road. This step will help you make wise decisions when choosing drivers for your company cars.
Buying a vehicle for your company is a smart investment, but you must consider many factors before investing funds in cars. First, ask yourself if the timing is right. Next, determine if an automobile is a necessity for your business. Also, make sure you have trustworthy personnel who will drive your vehicles safely.