Starting a small business requires a significant amount of money because theres a lot to buy and do. One of the expensive things you have to buy is a company car. Despite being costly, a vehicle for your business has tons of benefits. On average, a used car retails at $28,000, while a new car sells for about $47,000. However, you need to consider several things before making this major purchase. Heres what you should do.
Choose the Type of Company Car
Your buying decision should be guided on why you need the car. Since the vehicle will primarily be used for business, take time to evaluate how it will be used, whether you need a driver, and how much space you need. If youll be making deliveries, consider a light truck that can handle heavy loads. Take time to compare cars by different brands to get the car that suits your business needs.
Choose Between Leasing and Owning
According to statistics, the percentage of car buyers who prefer to lease vehicles rose from 31% to 52% in 2021. This sharp increase is because more buyers are weighing the benefits of leasing over owning a car. If you choose to buy the car, you might need financing, which you have to pay back over a specific period.
On the other hand, with leasing, you only need to make the initial down payment and make monthly payments during the lease term. Before buying the company car, choose the best option depending on how youll use the vehicle. Leasing might be a better option if you plan to upgrade to another vehicle in a few months or years.
Consider Purchasing a Used Car
Used cars are cheaper than new ones, however, they might come with more repair and maintenance costs. Therefore, you should have the vehicle inspected by your mechanic first to rule out any problems. A used car will save you tons of money.
If you are a new business owner, you might not have enough cash to cover the costs of a new vehicle, so you can get a used one and save money. You can approach your bank to find out how much auto financing you qualify for if youre short of money. Once you prequalify an auto loan, auto retailers will offer you a loan with better terms.
Once you buy the car, ensure that you brand it with your company logo and details. Driving to and from your company premises can get you about 30,000 to 70,000 vehicular impressions daily. Most road users could be your potential customers, so promote your business every chance you get. Ensure that the branding is high quality and includes key information such as contact details. This is one of the best ways to use your business car to attract customers.
A business vehicle is a good investment. Apart from being a marketing tool, it makes it easier to deliver products and move around. Weigh the pros and cons before you make a decision about buying a new or used vehicle for your business.