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Should You Buy a Truck? A Car? What to Know About Investing in a Company Vehicle

Time to take your business on the road.

Company cars aren’t necessarily just for pizza joints anymore. More and more businesses of all kinds use company cars to allow for face-to-face contact between employees and customers in the digitized world.

There are, however, many factors to look at when considering the purchase of a company vehicle. Taxes, upkeep, insurance; weighing the pros and cons of the worth of a company car can take all day. 

Here are some things to consider before purchasing a company vehicle.

Why Do You Need a Company Vehicle?

Depending on what your business does, the need for a company vehicle might be undeniable. If you offer products or services where your employees are in constant motion, then putting them in a branded vehicle is a no-brainer.

In other circumstances, however, it might seem like an unnecessary expense with a ton of liability attached. It’s certainly easier to have your employees use their own vehicles and reimburse them for the cost of gas.

Let’s take a look, here, at the benefits of providing a company vehicle(s) to employees.

Not Everyone Has a Car Nowadays

It’s 2019, and more and more young people are holding off purchasing vehicles for one reason or another. The location of your company will be a factor in this, as people in larger cities are less likely to require their own transportation.

For you, this means that your employees cannot (as) efficiently get to meetings with clients or potential clients. Having a company vehicle around can give them a resource to show up to meetings on time and in style.

Tax Deductibles 

So long as the vehicle is used solely for business purposes, there are many deductibles to take into account. For you, as the owner of the vehicle, the initial cost of the vehicle, as well as the cost of maintaining the vehicle, can be deductible.

This means that in addition to the payment of the vehicle, things like gas, repairs, and tires can all be deducted, saving you loads of money.

But as mentioned earlier, you must keep records of the vehicle’s use. If the car is used for personal reasons then taxes can get complicated. Always keep track of who is driving where when in order to avoid having to jump through hoops with the tax person.

Branding

Of course, you’ve seen vehicles all over the road with big, bright company logos. If you’re a business that offers a service or product, then a company car or fleet of cars is a huge branding opportunity.

Branded company vehicles, in addition to the obvious traveling advertisement factor, tell potential new customers that you are happy to accommodate them by traveling all over your city and beyond for their needs.

For example, this has been highly successful with a company like Nerds On Site. You also commonly see this with the trades or home repair services. If you’re a housing renovation company, it’s a perfect opportunity to tell the whole town to contact you for their reno’s.

Provides Control and Consistency

Owning a company vehicle or fleet gives you control over many potentially harmful situations. If you own the cars, you know how they are kept, and when the last time they were serviced.

If you leave transportation in the hands of your employees, there is just less certainty that the vehicles are in good enough shape to get the job done.

In addition, if you have your employees using their own vehicles you could be presented with an image problem. You don’t want your top salesperson showing up to a meeting with a high powered client in their rust-covered ’94 Topaz.

Having a company car gives your employees a chance to look the part, as well as get to locations safely.

Can You Get By Without a Company Vehicle?

While a company car or truck is a huge benefit in many cases, it’s important to weigh the cost against what you will be doing with it. Cars are expensive to buy and keep in roadworthy condition. They also present a litany of potential issues that can be very costly as well.

Who Definitely Needs One?

To reiterate from before, it really depends on what your business does. If you’re a roofing company, you’re more than likely going to need a fleet of trucks or cube vans to get your employees from point A to point B with all of the work materials.

If you’re a small marketing solutions firm, then a fleet of vehicles may benefit you, but probably isn’t a make-or-break in the success of your company. In most cases, a company vehicle is a luxury, not a requirement.

There are some pretty obvious cons to consider after you’ve gotten through the excitement at the range of possibilities that come with owning a company vehicle.

It’s Expensive

Cost is the biggest hurdle. Even a cheap vehicle is a large cost to most small companies, and the benefits may not be immediately visible. It’s important to crunch the numbers before a large purchase to determine if you’re saving by owning a vehicle or actually spending more maintaining it and paying for insurance.

Learning Is Hard

There are many logistical problems that may arise with owning company vehicles as well.

For instance, if you’re a company that is thinking of taking on freight and shipping responsibilities, then there are a lot of rules and regulations to go over. Hiring good drivers, having knowledge of shipping costs, and weight restrictions for vehicles (more info here) are all things that need to be considered.

Trust

Finally, having to keep track of what the vehicle is being used for can add a lot of time and effort to your day to day operations. So too, trusting your employees to be wholly responsible for something that you’re liable to keep in good shape is a big step in a boss/employee relationship.

Hit the Ground Running

So, getting a company vehicle is dependent on what you do as a business.

If you feel that you need to provide a delivery service for your product, get a company vehicle. If you want your employees to be able to safely and efficiently get to client worksites or big meetings BUT money is tight, then sit down and write out the pros and cons.

Doing a bit of research on this topic could save you a lot of money in the short, and long run.

Please visit our blog for more advice on how to run your business in the ever-changing world.