In 2019, the price of vehicles sold in India was 7.7 lakh, according to GaadiWaadi.com. Shopping for a business vehicle is fun and intimidating at the same time. If you don’t have a clue on how to narrow down your options, you are likely to make the wrong choices.
While plenty of thought will go into budgeting and the car model, it pays to consider commercial auto insurance. Protecting your business from mishaps should be a top priority when investing in an automobile. Check out these tips on choosing the right vehicle for your business venture?
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Define Transportation Needs of the Business
Many entrepreneurs invest in automobiles to convey success and prestige in their market. However, purchasing a car you don’t need can drain your business finances. Because of this, you need to determine the reasons your venture requires a vehicle beforehand. For example, if your employees spend most of their time traveling, buying a company van or truck is essential. A corporate car enhances productivity by making mobility less stressful among employees.
Determine The Driver
Who will drive the vehicle for business? Will it be the employees, the owners, or both? As the owner, you will have more control over your driving behavior than that of your employees. If your employee has a poor driving record, this could ultimately affect the overall costs of your insurance rates and liability exposure.
Keep in mind, when you add coverage for your employees, the insurance rates will automatically increase. However, it will also fluctuate if the employees drive their own vehicle or company vehicles. Not only will you need to consider the proper insurance coverage you’ll need, but also the liability of a third party using your business vehicle.
Have a Set Budget
Your company’s financial status will influence your car buying decision. For instance, if your business is struggling, you cannot purchase or lease a vehicle. It is, therefore, essential to assess your business finances and come up with a budget. This tactic helps you determine the affordability of a new or pre-owned automobile.
When budgeting for a company vehicle, don’t just look at the selling price. A rule of thumb is to calculate the cost of monthly insurance premiums, repairs, fuel, and maintenance.
Understanding Leasing vs. Buying For Business Use
With the total cost of automobile ownership in mind, it is easy to choose between leasing and financing your business vehicle. For instance, the lease payment will normally be deducted as an expense on your profit-and-loss statement. This can become an advantage to saving money on your taxes. Not to mention, regular maintenance is covered as part of some leases. This will allow you to return the vehicle once the contract is over without any worries about selling or disposing the asset.
On the other hand, buying a business vehicle allows you to sell it and recover some of your original investment. You will also not have to worry about exceeding mileage limitations and add custom advertisements on your vehicle if you choose to do so. Not to mention, certain hybrid and electric motors may be eligible for efficient tax breaks. Whatever purchasing option you choose, make sure your business automobile is affordable and fits your needs.
Compare Models and Prices Online
With the internet, choosing the best model for business activities is straightforward. You can get an idea of automobile prices, features, performance, and quality auto review sites. However, experts recommend using the comparison tools offered by credible online dealerships.
Depending on your preference, you can test the differences and similarities of various models. This technique will guide you in identifying the right car for your business in terms of affordability and reliability. You may also want to read consumer feedback to clear any doubts. Most dealership sites provide unbiased reviews posted by verified vehicle owners.
Look for the Right Features
A company vehicle represents your brand. If your car has appealing features, it will attract consumers. Therefore, select an automobile that has a pleasing exterior design. If you’re partial to having your business represented by a company vehicle, choose an eye-catching model that will guarantee your business will be noticed.
Also, focus on the interiors to make sure your employees enjoy comfort, safety, and seamless navigation. When selecting a car, look for one with the latest safety tech features such as lane departure warning, blind-spot camera, and automatic emergency braking systems. Cars equipped with these elements are reliable and guarantee safety.
Repair and Maintenance Costs
Before choosing the right vehicle for your business, you will also need to consider the additional costs of regular repairs and maintenance. This is essential to preventing any major issues that may occur in the future. Also consider cost of parts, availability of parts, and ease of maintenance when selecting the vehicle. It may be worth considering a centrally managing body shop that will maintain your vehicle types in advance.
Timing Your Purchase
When economic times are low, automakers pull out the best deals, cutting prices, and offering the best loan terms. If your business is still running strong during the pandemic, now may be a great time to purchase a new car for your business. You can also consider purchasing your business vehicle between December and January as new models arrive during the autumn season, pushing dealers to put last year’s vehicles on sale.
If you’re not fully committed to buying a business vehicle just yet, don’t let your rep force you into believing otherwise. If the manager won’t accept your price negotiations, threaten to walk on the deal. After all, they’ve also invested their day on making your sale.
Purchasing a business vehicle can be tricky. Nonetheless, you can make wise buying decisions if you research and plan well. When shopping for a business car, pay attention to prices, features, and company needs. It is not the most stylist or practical vehicle that wins, but the one that helps boost the finances of a business venture.