Business First Family Business, Accounting, Finance, Investing, Marketing And Management
Having a business vehicle allows you to make significant savings, especially when it comes to tax deductions. In essence, you can make two types of deductions: one for car ownership, and the other for the actual costs of driving the vehicle for business purposes. The advantages of a company car go beyond taxes, of course; by providing one or more staff members with a car, you have greater freedom in terms of asking them to cover out-of-state zones, and you also have the potential to use the car for branding. If you have crunched the numbers and find that a company car is cheaper than a leasing agreement, ensure you pick a vehicle that is a perfect match for your company’s needs.
Matching The Vehicle To Your Brand
What industry are you operating in? Are you a luxury lifestyle magazine or a restaurant business? A marketing firm or a teaching academy? When buying or leasing a company vehicle, the tendency can be to opt for ‘cheap and cheerful’. In fact, every single design choice (from what you wear to the car that represents your company) tells a story about your brand. If you are selling exclusive watches or you work in luxury real estate, your vehicle should be a reflection of the lifestyle you are offering those who rely on your products or services. If exclusivity is not part of your brand, then cost savings should definitely be a top consideration. When making your choice, it is important to determine the price-quality ratio for your vehicle and ensure that it caters to your mileage and other vehicle needs.
Fuel And Maintenance Savings
If the person driving the company vehicle racks up considerable mileage, reducing fuel consumption is key. Diesel and hybrid vehicles cost more initially, but fuel and maintenance costs can run high. Green vehicles are certainly interesting from the point of view of sustainability. Right now they may be pricier, but a Bloomberg New Energy Finance analysis predicts that by 2022, electric cars will be cheaper to own than conventional cars; this is the case even if conventional cars improve their fuel efficiency by 3.5% annually.
Cutting on Insurance Costs
The amount of insurance you will pay yearly depends on what category your business vehicles fits into. You can expect to pay around $1,600 a year for the average business car, but some cars on the list will cost as little as $1,100. Every year, insurance companies publish lists of average premiums so check these out when working out the total cost of your purchase.
Technology Matters
If the vehicle will be used for long trips, chances are, you or your employee will need the right technology to ensure that clients can be attended to while driving. Bluetooth is standard in most cars, though you might also consider a quality GPS system, which will enable you to be punctual and save on extra fuel costs that getting lost can entail.
When picking the right vehicle for your business, research should be the number one priority. Rely on online guides, financial advice from your accountant or bank, and consider whether buying, leasing, or even covering an employee’s vehicle costs are more cost efficient. Finally, remember that cheap isn’t always best when it comes to cars, especially if you will be transporting high-end clients frequently in your vehicle.
