If you’re a business owner or manager looking to expand your business assets by getting a vehicle or two, you’re in luck. There are so many factors to consider when choosing a company car and figuring out how much to spend on it when the time comes.
Depending on your business and what you’d be using the cars for, you might find you have different needs and different places where your investment might make itself the most useful. But how much you should actually spend on a company car has a lot of components.
Each car is different, and each company has its own unique needs. No matter what your priorities are, there are different ways to spend your money on a company car, and different ways to use that money effectively. From the first investment to the stereo system, there are plenty of things you can consider to make your company a better functioning place for everyone.
The Initial Investment
When people ask the question of how much money to invest in a company car, the answer begins similarly to the same question about personal vehicles. In short, it depends on the type of car you want to buy.
Obviously, a commercial vehicle for daily delivery driving will be different from a car used for transportation and entertaining clients. Considering factors like durability and brand identity can be important, and once you decide on the right car brand, you can have a better idea of how much you should invest in the company car.
Another cost to consider is the mechanical upkeep and the maintenance. If your company owns the cars, you become responsible for the costs associated with maintenance. This goes for all kinds of upkeep, from oil changes to unforeseen repairs that need to be made.
Consider how much your employees will be using company cars outside of work, how much they’ll be using company cars at work and what kinds of deals you can make with manufacturers to keep the cost of upkeep low.
Something else worth asking is the cost of any modifications you might want to make to company vehicles. Whether you need to make internal modifications for performance and safety on more utilitarian vehicles or comfort and style-based changes like enhancing the stereo system or changing the interior, those costs should be factored into the decision, even if you don’t plan to make those changes immediately.
Additionally, making modifications usually means you need to buy the car, not lease, so it’s important to keep that in mind.
The DIY Approach
You can also make certain small changes on your own or on a smaller scale in company cars, too. Specifically, changing elements like the stereo system, installing Bluetooth capabilities and detailing are all great places to start, especially if you’re acquiring a previously owned car.
Taxes and Fees
Another detail that comes into play with the investment are taxes and fees that can do along with company cars and vehicle use. While this will mostly fall to the employees themselves as car allowances can be considered taxable income, each state is different, and it’s important to check with the laws in your state.
To Lease or to Buy
Whether you choose to lease or buy company cars, you’ll still have to make an investment. However, you need to decide which investment is right for you and your business. When you lease a car, it’s basically like a long-term rental, so you aren’t committed to keeping it. However, you also can’t modify a leased car. Really, it’s all about what works best for you.
How Much Should You Invest in a Company Car?
Each company is different and has different needs. While you might be taking clients out to dinner, you might just as easily be delivering packages to customers. No matter what, your needs and your budget will balance one another out to find the perfect vehicle for your business.