If your company requires a vehicle to work effectively, whether it’s a basic company car, a pickup truck, or a whole fleet of vehicles, you need to take your time and be sure to make the right choice.
Vehicles are expensive, which means choosing one is no small business decision. That means before you actually make a purchase you should ensure that you know what you’re doing. That’s why I’ve put together a few basic tips to help you buy the right vehicle for your business:
1. Do you need to buy at all?
First of all, think about whether you need to buy a vehicle at all. There are a lot of great commercial vehicle rental packages that are flexible and could be more affordable to your small business on a monthly business. Obviously, this may cost you more money in the long term, but if cash flow is an issue, it can be the best choice. So, weigh up the pros and cons of buying vs. renting before you do anything else.
2. Know what you need it for
This sounds so obvious, but so many business owners are so concerned about choosing a vehicle that looks good that they don’t think of the practicalities like whether they’ll be able to afford the mileage bill or whether a truck and trailer would be better for transporting their loads than a basic van – and if that’s the case these tips will help you find the right truck and trailer combo – which means they end up wasting a whole bunch of money on a vehicle that really doesn’t work for the business, and which they will end up having to replace after way too short a time.
3. New vs. used
Many business owners don’t even consider buying used because they want their commercial vehicle, which is a part of their brand, after all, to look as good as possible. That’s understandable, but it doesn’t necessarily make financial sense. There are plenty of used vans and cars that look just great and used cars are obviously significantly cheaper, which means they can be a better option. That being said, new vehicles do have their merits too, primarily because they tend to offer better fuel efficiency, and if your vehicle must meet business regulations, new cars are more likely to pass any tests. Basically, you need to weigh up the pros and cons of each before making a choice, but you’d be foolish to rule either option out.
4. Financing the vehicle
When it comes to buying the vehicle for your business, you have a number of options available to you. If your business is in good shape and you have plenty of working capital available, buying outright will make the most sense.
If that’s not, taking out a loan to pay for your vehicle will probably be necessary, Since you are a business, you have the option of using a business loan or a vehicle loan for this, so be sure to compare rates.
If your cash flow situation is really tricky, renting could be a better option, for now at least.
Finding the right business vehicle can be a challenge, but as long as you do your due diligence, you should get it right.