Running a business means taking risks, managing a team, and making smart financial decisions. When managing assets, you cannot help but ensure they make meaningful contributions to the company. For example, company vehicles improve your bottom line, but at some point, you will have to repair or replace them to improve downtimes. Although company car replacement cycles have increased from 3 to 4 years, you may need to work outside the range to achieve your desired results. Here are some simple ways to buy vehicles for your company.
- Make an outright purchase
This step is the most straightforward and less stressful way to acquire a car. An outright purchase makes financial sense if you have the funds to procure a couple of vehicles or an entire fleet. At first glance, it looks like a steep expense for your business, especially when buying an entire fleet. However, the long-term benefits and perks are compelling reasons to do just that for your company. For instance, you don’t have to worry about making monthly deposits for your company car. Again, bulk buying and outright payment may entitle you to some interesting discounts from the dealership. Remember that your business’s financial strength will determine the ability to buy more or one-off. Buying company cars outright has many benefits, but making certain considerations first is crucial. For example, even with ample company funds, you must assess critical and urgent business areas that need money. A classic case is holding on to salary payments because the company needs new cars. Therefore, before signing that cheque, ensure the outright purchase wouldn’t affect other business areas.
- Consider part exchange
It is easier to use this strategy if your company already uses the same car brand. For example, a VW part exchange is possible if your business’s vehicles are the same brand. It can be a particularly beneficial arrangement from a financial point of view. It works on trading in your old car for a new one. You must pay the cost difference, and you’re good to go. However, some dealerships have terms and conditions that must be followed. For example, by the end of a 4-year replacement cycle, the company vehicles must have covered up to 80,000 miles each. Anything more than this value may disqualify you from a part exchange arrangement. Enrolling in a vehicle part exchange programme makes financial sense because it is cheaper than buying new brands from a different manufacturer. However, remember to conduct a vehicle assessment before starting negotiations.
- Leasing
Some businesses prefer to lease their cars because of flexibility and cost-effectiveness. Your company’s monthly payments are for an agreed period, but that’s not all. Some leasing terms include favourable servicing packages that include maintenance. You cannot help but agree that this augurs well for your business, especially when owning a car might be too expensive for your company type. Another advantage of leasing is that it allows quicker access to newer models. It is hassle-free, and maintenance wouldn’t be your company’s headache. Before leasing, however, it would be advisable to do all your checks and balances to ensure your business isn’t running at a loss. Sometimes, the total cost of lease payments may buy two small cars for your business. Doing these calculations can help you save money and your company operations.