At some point, it may make sense for you to invest in a company-owned vehicle for your business. From tax deductions to insurance benefits to the utility the car offers your business, a company car is frequently well worth the cost. When buying a new vehicle for your business, here are five factors to keep in mind.
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1. Establish Your Budget First
This may seem obvious, but business owners have gotten in trouble by overstretching their budgets in buying a company car. This often happens as a result of adding features, upgrading trim levels, and buying additional accessories at the dealership. You can safeguard against this by establishing the absolute bottom line that you can spend and making sure you don’t exceed it.
2. Carefully Consider the Tax Implications
Part of creating your budget for the car means understanding all the costs and financial benefits. And to do that, you’ll need to have a firm understanding of the tax implications not just of buying the car but also operating it. You’re eligible for write-offs from everything from the initial purchase to fuel costs to maintenance and repair. Make sure you’ve got a good sense of how this all factors into your expenses.
3. Consider Your Business’s Brand
Remember that a company car is part of the way you present your business to the world, both to customers/clients and other businesses you work with. You want the car you buy to be a reflection of the brand your company aspires toward. This might mean very different things depending on the type of business you operate. Make sure to take a moment to consider what your choice of company car is saying to those who associate you with it.
4. Explore Your Options for Purchase or Lease
In many cases, buying a new vehicle is your best option. However, it may also make sense to buy a used car or to lease a car. An auto dealership will be able to work with you to explore your options and also figure out your financing details. And be sure to take advantage of the opportunity to negotiate as a business. Dealerships are always on the lookout for repeat business and higher-volume customers, so you may be able to leverage that into a more favorable deal.
5. Consider Fuel Economy and Other Relevant Features
A company car is going to be used in the operation of your business, and that can mean different things depending on what you’ll need it for. But one thing that will almost always be important is prioritizing fuel economy. Your business will be on the hook for fuel costs, and the lower you can keep them, the less money will leave your pocket.
Beyond that, you ought to think about what features will make your company car as helpful and functional as possible. This may be tech and navigation features, or it might be extra storage and hauling capacity. No two industries are the same, and a different vehicle may be more suited to each. Research your options so you can make an informed decision on the best company car for your company.