Fridges or laptops eventually become faulty and require repair or sometimes replacement. When you realize a fault in your laptop or fridge, you walk into the nearest store and get the device fixed with an hour or two, or you replace it. Company cars too become faulty. However, you cannot walk into a car dealership company to buy a car like you would buy a fridge. Your company never wakes up and decides to purchase a car, writes a cheque and drives away with another business car. Consequently, every business needs to take time to research a vehicle before they buy one to ensure that they have considered several things. That way, the company will not regret the decision of buying another company car or buying a particular model.
Also, your company wants to decide between buying a new or used car for the business. A savvy company must be ready and well prepared before they set out to buy a company car. These things will prepare your company before you even get to the showroom.
Understand the primary use of the car
The first thing every business needs to understand is the reason for buying a company car. Most companies buy cars as an asset; hence, they purchase them using long-term financing like a loan. Therefore, your company needs to think about the amount of money that the car purchase will make for the company. For instance, if your company wants a car to carry documents for short distances, a compact car would be most appropriate because it will also help in saving on courier expenses. However, a van would be suitable for a company that needs to carry heavy loads. The most important thing is to avoid unnecessary features that could end up costing your company more money.
Insurance is an essential aspect of every company car, and it should not be sidelined. Therefore, your company needs to find out the insurance bracket that the vehicle falls under, to be on the know-how. In fact, every car accident lawyer wants to confirm if your car is insured or not when taking up your car accident case. However, you should beware of vehicles that are deceiving by picking a car sensibly. Unfortunately, most people have this notion that small cars have low insurance costs. Some cars are small and cheap, but their engines have more liters than some larger cars, so they have unfavorable insurance. Also, you need to get several insurance quotes, rather than settling for an insurance company without getting quotes from other companies.
It is paramount that you decide on the budget before you even start searching for a company car. You need to talk to the company’s finance department to get the amount that they are willing to spend on the car purchase so that you don’t get a car that is beyond your budget. Also, you need to ensure that the budget you are working with is realistic, based on the market prices for cars. It is also vital that you consider the running costs, such as repairs, maintenance, and fuel costs. You don’t want to purchase an expensive car that your company will not manage to maintain, which is a wrong investment decision.
Arrange the financing
You need to arrange for financing before you even walk into the showroom. One of the things that companies overlook, yet it catches up with them later when applying for financing is their credit rating. A company needs to check on its credit rating first to be sure that it qualifies for car loans. Also, you can choose from an array of financing options such as car loans and chattel mortgages. Each financing option has its limitations and advantages; hence, select the most favorable option.
Company car tax
Your company cannot overlook the fact that it has to pay taxes for the car it purchases. Notably, cars with lower CO2 attract lower car taxes for your company. Generally, small cars attract lower taxes than big cars because they have lower CO2 emissions.
by: Dennis Hung