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Mistakes you can’t afford to make when buying a company car

buying company carbuying company car
buying company carbuying company car

 

Mistakes you can’t afford to make when buying a company car

Any business owner knows the value of having a company car. You can use it to transport employees to and from work, drive to meetings with clients and run daily important errands with ease.

It also gives your company a chance to advertise effectively, by using a vehicle wrap with your business branding on it. However, there are mistakes that many of us make when we are looking for company cars. So, once you have applied for car finance, read below for some tips on what mistakes to avoid when buying a company car.

 

Overestimating how much your company can afford

Owning your own company or business is a huge feather in anyone’s cap, but it often comes with the misleading notion that the company is wealthier than what it really is. As with buying a personal car using vehicle finance, it is important to avoid overestimating how much your company can afford to spend on a car.

In order to ascertain what you can really spend on a car for your business, you should use a car loan calculator and use a spreadsheet to calculate your expenses, to see whether or not a car is viable. While it is important to stay within budget, you should not compromise on features that you feel your employees will need when using the car, such as an air conditioner or a radio with Bluetooth capabilities for hands-free urgent phone calls.

 

Not doing research beforehand

Researching car models and prices before you even apply for car finance is one of the most important steps when purchasing a company car. A company car will be used to represent your brand, so it is important to choose carefully while keeping your budget in mind at all times.

You should ideally do research online about the brands you prefer and compare prices from different dealers and websites before you head out to choose your company car. Find out about the different pricing options available to you and whether or not the dealers you will be visiting offer these terms. You will also need to research the safety features of the cars you prefer and ask your employees what is important to them in a vehicle.

 

Not factoring in total ownership costs

While a company car is not the same as a personal vehicle, you will still have to consider the total costs of ownership. The factors you will have to include in the total ownership costs are the lease costs, the insurance contributions, the cost of fuel based on how often the car is used, and company taxation costs.

Many times, when buying a new car, we are swayed by low price tags. While an affordable price is ideal for a company car, you will need to factor in all of the other costs in order to see what you will truly be paying for the vehicle. Aside from car finance repayments, you will also have to factor the above mentioned expenses before you make any decisions on which car best suits your needs. You can use a car loan calculator or ask your bookkeeper to help you to get a clear picture of your expenses.

 

Failing to consider all your options

This ties into the debate over leasing versus buying a company car. If you do not consider all of your options, then you might be paying more than you can afford or you might have taken a bad deal because you did not shop around.

You will need to consider whether leasing is right for you or if buying is a better option for your company’s car needs. While a lease might sound appealing, you need to remember that you will to have any equity at the end of the lease period, meaning that you will not own the car or be able to resell it to gain money for a better model. However, buying a car can come with its own disadvantages, such as depreciation in value and the maintenance costs that come from your own pocket. You will need to consider all of your options before making any decisions.

 

Always have a mechanic look it over

Having a mechanic look over the car you have decided to buy or lease before you do so is essential, for both personal and company cars. The safety of the vehicle is crucial, as your employees will be using it on a daily basis and they need to be sure the car is safe and stable to use.

Most auto shops offer this service for an affordable fee, or you could use an auto shop that you trust and have used before to send in a mechanic to look over the car. He will need to check the tyre pressure, look for any fluid leaks and make sure the wheel alignment is correct. This step in the car buying process is important not only to ascertain whether or not the car is right for you but also to be sure that it is the safest option for anyone who will be using it.

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