Buying a car for your business? There are a few blunders you may want to avoid.
Below are just some of the mistakes that people make when buying a company car:
1. Showing off your success with a sports car
If your business is making a lot of money, you may feel you deserve to treat yourself to a sports car. However, this should ideally be used as a personal vehicle – and not a business vehicle. Turning up to meet a client in a Porsche might seem like a good way to show off how successful you are, but it could also suggest to clients that you’re earning a little too much – and therefore overcharging customers.
This may be less of an issue if you’re meeting high-end clients. However, if you work a trade and deal with everyday clients, they may question your ability to afford a sports car more. Besides, a sports car may not be practical for some business applications like transporting multiple people or carrying lots of equipment (most sports cars aren’t very roomy).
2. Buying an old, worn banger to save money
Having a vehicle in some professions could be better than having no vehicle at all. But you ideally don’t want to be showing up to clients in a battered old car, as they may start to doubt your professionalism. A vehicle in poor condition could also mean more problems – which could mean breaking down in inconvenient places and having to pay expensive surprise repair bills.
All in all, you therefore need to be careful when buying a vehicle on the cheap. Many dealerships have Edmunds have a huge amount of cheaper used cars to choose from and you can trust that they’re in good condition. You don’t have to buy a rusty old banger to save money.
3. Going too big/too small for your needs
Having a larger company car could be necessary if you regularly need to transport a lot of passengers or if you need to transport bulky equipment around. A smaller company car could meanwhile benefit you more if you’re driving around a city and need to take advantage of limited parking. Think about your needs so that you avoid buying a company car something that is too big or too small.
4. Resorting to a hefty car loan that eats away at your profits
Buying a car with a loan can reduce the upfront costs and could allow you to buy something a little flashier than you may otherwise be able to afford. However, you need to consider how much the monthly loan repayments are going to set you back. Some new business owners bite off more than they can chew and end up struggling to pay loan repayments each month. Consider your monthly budget before you consider finance on a car.
5. Buying a company car when you really don’t need one
How often are you going to be meeting customers in your car? If most of your work is done remotely or from an office/store that you rarely leave, a company car could be an unnecessary extra expense. Many business owners get away with just using their personal vehicle or are able to get around via taxi or public transport if need be. Weigh up the practicality before you buy a car for business.