Choosing a company car for your business is an appealing prospect. It’s not just a piece of business equipment, as it also projects your business image to the rest of the world. Yet it's not all about image and you should make sure that your decision on which car to buy or lease is not simply an emotional one. Here are 5 points to factor into this important business decision.
1. Complete Your Business Plan
Consider the intended use of the car (or fleet of cars). Will it be used by consultants or sales teams on client visits, or supervisors or managers visiting business sites? Will there be passengers and, if so, who will they be - staff or clients? Will it be used for deliveries and if so, what load space is needed? And will it be making long trips or short runs? List your functional needs in order of priority and then check the company’s budget before considering your options. Do you really need a 4x4 SUV, or will a sedan or station wagon be just as good? There’s more on costing in our earlier article, Why You Should Write Your Business Plan Before Buying a Commercial Vehicle.
2. Research Brands and Models
With budget and business needs established, it’s time to research some models in depth. Find out which models are popular as company cars in Australia, and then read online review sites and press articles. Next, request quotes from the manufacturers or local dealers.
If you’re buying new, the Australian Automobile Association (AAA) Best Car Awards provides a list of the best value vehicles currently on the market. Car financers can also be a good source of price deals from local sources if you decide to buy a used vehicle.
Longevity is important, as you need to consider what your company car will be costing you in three years’ time as well as next week. Some brands have a better reputation for lasting well than others, so this is something to consider if you’re planning to buy outright. If you plan to lease a company car, then it isn’t an issue, as the leasing company will be taking the vehicle back.
4. The Tax Position
This is one to discuss with your business advisor, accountant or finance manager. For instance, small businesses can currently deduct assets costing less than $20,000, which includes new and used company cars, under ATO regulations. The ATO also gives GST credits for new vehicles. If you’re looking at leasing a car, check the ATO’s guidelines on novated lease vehicles. Also look at insurance costs, as these vary by vehicle size.
5. Now Think About Image
You probably thought about this first, but really it should be in the later stages of the decision-making process. The company car will of course say something about your business to those who see it, whether or not you decide to advertise on the bodywork. SUVs, small economical cars and luxury cars all say something different about business values, namely in terms of efficiency and ecology. What should yours be saying?
Are you looking for finance to help you purchase a new vehicle? 1800Approved is one of Australia’s fastest growing car and asset finance brokers. We specialise in car finance, equipment finance, plus insurance and warranty services, and have previously arranged deals from AU$10k to AU$5m. 1800Approved services clients across Australia, working with over 30 independent lenders to find the best deal.
We can also help with sourcing your new and used car warranty, and by sourcing vehicles and equipment through our Drive Wholesale arm.
To learn more about how we can help you, call us today on 1800 277 768.