Buying your first company car is not only a matter of personal choice but also an important business decision. Of course, there are many good reasons why a company car is a good investment: it can be cheaper than buying it for private use, you can use it for branding purposes, your employees can use it too, and this way you have better control over your company’s image. However, buying your first company car isn’t always easy, especially if you don’t have an unlimited budget, and you cannot pay for the car upfront. And once you’ve found the right financing option, which is the right car for your business anyway? Should you go for that modern design you’ve always dreamt of, the best fuel efficiency, or the most practical features? If, when buying a personal vehicle, your personal preferences and requirements are the only factors to take into account, when it comes to your company vehicle, you have to consider other things too: who will drive the car and where, and whether the car matches your brand’s image.
But first, should you rent or buy?
If you’re still not sure that buying a business car is worth it, renting can also be a great idea. Oftentimes, business owners feel pressured into making this major purchase, thinking that having a company car is a sign of success. But this isn’t necessarily the case, and sometimes this may force you to spend more money than you have on something that you don’t need. To come to a decision that makes financial sense, consider these factors:
- Do you need a car to meet with clients several times a year, or do you need it on a daily basis?
- Would the car serve your branding purposes?
- Would you be the only one using the company car, or would other employees use it too?
- Are the cars that employees currently use to meet with clients affecting your brand image?
Ultimately, you have to draw the line and compare costs. If you’re paying full price for a company car to sit in the garage and just be used a few times a year, then renting makes more sense. But if you need it every day and it could also help the business, the price of the car plus the associated costs (insurance, add-ons, etc.) are worth it.
If you’ve decided that buying a company car is the best option, it’s time to decide on the model and features. And that’s where you’ll have to weigh a lot of pros and cons and keep your business’s best interest at heart.
A lot of people dream about arriving at a business meeting in a sleek two-seater German car or cheating the morning traffic in a Mini Cooper. But is a small car right for year-round business use? If you’ll also be making occasional deliveries with the company car, or use it to drive several employees home, then it makes more practical sense to invest in a bigger vehicle. Contrary to common belief, a bigger car isn’t necessarily more expensive. For example, this St Louis Ford dealership has excellent financing plans on new Ford SUVs, which are among the most popular company vehicles in the US.
When you drive around town in your company car, you are passively promoting your business. Your car becomes not just a simple means of transport, but also a means of advertising. This is why you need to make sure the car model matches the values associated with your niche. For example, if you work in finance, insurance, or have an investment firm, then it would be appropriate to drive in a luxury vehicle – it denotes success, wealth, exclusivity, and these are words you want to be associated with your brand. However, if you have a family business, such as a restaurant, bakery, or flower shop, it would be more consistent branding-wise to go for an average-priced family vehicle.
In general, when buying a company car, a good rule of thumb is to go for a model that stands out in the crowd. After all, you don’t want it to blend in with all the traffic; you want potential customers to notice it. If it’s not appropriate for the car model to be out of the ordinary, then you can compensate by personalizing it with your company logo and creative stickers.
So, you have an eye on the perfect company car, which matches your branding strategy and stands out in traffic. You can’t wait to drive it to meetings and around town, and you’re certain that it will bring good luck to your business. But, before you settle on this precise model, consider one more factor: the fuel efficiency. Sure, the car might look amazing, have the right size, and all the features you need, but if it eats up a lot of fuel and you have to refill the tank every week, it’s not really worth it. Consider your long-term needs too: can you afford to pay this much for gas all the time? The best idea here would be to use a miles-per-gallon calculator and if the costs are too prohibitive, reconsider your options. The good news is that, once you’ve found a car category, you can explore fuel-efficient alternatives within that category.
Check on the competition.
If you have a local business, it’s also a good idea to check what car the competition is using and use it as a benchmark when searching for vehicles. Ideally, you want a car that looks just as good or better than theirs, but it’s important not to get carried away. As tempting as it might be to one-up one of your larger competitors by driving a more luxurious car than they do, you shouldn’t buy it just for vanity and ignore the budget. Sometimes, buying a mid-range model and customizing it is enough to give you a competitive edge.