No matter what your business might be, buying a car as a business owner might sound like a piece of cake, but choosing the right path can be extremely tricky. When planning to buy a business car, there a lot of things you should take into consideration, such as your business needs and the model you’ve been dreaming about. Thus, your purchasing needs should not overlook the actions of your business, its growth and how much usage your newly purchased business car will have.
It is not a secret that for some business owners, a car transmits stability, success and prestige in the eyes of their customers and competition. Rushing to invest in a business car is a foolish decision if you don’t calculate your business needs and other important factors that will affect your company’s cash flow. Here are a couple of things you should expect when planning to invest in a business car.
Make Sure You Can Afford It
As soon as you’ve decided to invest in a business car, make sure your company can afford it. If your business doesn’t have enough funds to cover the purchase, you might need to consider a loan. This is where many business owners quit on the idea, because it implies a lot of paperwork and energy. If you’re a small business owner, purchasing a business car means you have to complete a commercial credit application, which further requires a personal guarantee most probably from you. If you have issues obtaining a loan, another alternative would be to obtain a car through leasing, which requires way less money.
Certainly, the hassle won’t stop here, because as soon as you’ve applied for a loan, the lending company must assess your company credit’s score along with your credit score as a guarantor. If you’ve never used or applied for business credit, we highly recommend you start by using a single credit card for purchases. Rapid monthly payments will help you build a track record and start building a steady credit score.
Size and Aesthetics Matters
Even though both matter very much, it is necessary to consider every journey your newly business car will make and evaluate how much space you’ll actually use. Most likely you’ll get to choose from a large array of vehicles, but make sure you don’t get excited too quickly before assessing your employees’ and company’s needs. Additionally, when it comes to aesthetics, you should keep in mind that a business car conveys your brand image.
A great car can be an unexpected basis of advertising, so if it’s aesthetically appealing, you can even gain some clients from it. You’ll want something that will blend in on the streets yet will turn heads in a positive way. So, keep in mind that an appealing, eye-catching vehicle can guarantee that your business will be noticed.
Good Fuel Economy Is Essential
Before you’ve purchased your new business car, you need to take into consideration the salaries and how to keep up with continuous refuelling. So, for example, you might need to know if the 2020 ford escape gas mileage is suited for your company income after you’ve evaluated more alternatives.
These are essential things you should not overlook when choosing the perfect car for your business, because it can be pretty complicated to budget a 5.0 engine when only transporting an important accountant between offices. Luckily, you can examine and keep an eye on your car’s gas or fuel economy by using an mpg online calculator, so you can save some of your business income.
Get the Insurance Right
One aspect one should take into consideration when purchasing a business car would be car insurance. Ensure that your newly purchased car has the motor insured, because standard policies usually don’t offer the level of protection you may need when you’re using the car for business purposes.
Because there might be a difference between standard rates and a business rate coverage, it might be tempting to get frugal about your insurance, which could overturn your policy. A great step would be to explore all types of insurance and find which one suits your company.
Timing the Purchase
With so many alternatives, offers and lots of companies curing down prices with attractive loan terms, it can be difficult to find the right time for a purchase. If your small business remains strong in the face of all these alternatives, the perfect time and deal will finally appear. Some recommend that the perfect time to purchase a business car and find the best deals is somewhere between December and January. When the best models have been exposed during autumn, the auto-dealers will put new models on sale. Make sure you research thoroughly and visit showrooms during this period to catch the best deals.
Tax Deductions and Ownership Types
The best thing about owning a business car is that you can save plenty from tax deductions. A tax deduction is established by the ownership deduction and the costs for using the car for your company desires. If your business is the owner, the costs of the vehicle as a business advantage and the costs for business are usually entirely deductible from the business taxes. If an employee is the owner, the costs for a car aren’t deductible as an advantage, but as a part of recorded deductions in case they’ve surpassed 2% of attuned income.
Lastly, we highly recommend that before you throw yourself on the first business car deal, you take your time and consider tax advantages and whether it’s steady enough to satisfy your company’s needs. There is no reason to rush the purchase if you haven’t found something reliable. To catch a good deal, you have to look carefully and have patience.
