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Buying a New Vs Used Vehicle for Your Business

Buying a New Vs Used Vehicle for Your Business

There’s a lot of debate around whether to buy a new or used vehicle, and when you are buying a vehicle for business purposes, the gravity of the situation goes to another level.

We could go on rambling about the pros and cons of buying a new or used vehicle, but what’s more important is knowing what’s best for your specific business needs. If a used vehicle serves your purpose, there’s no point wasting thousands of dollars on a new purchase. But if your line of work requires you to maintain a dazzling lifestyle, then you shouldn’t be driving around in a beater either.

You can buy a new vehicle any day and enjoy hassle-free ownership for at least the first five years, but if you are tight on budget and don’t want to slave away to pay off a hefty car loan, buying a used vehicle is a smart move. And here’s why.

Depreciation vs. Performance

Did you know that car engines are built to last at least 200k miles before a major overhaul? That’s a lot of miles for city driving. If you are using your vehicle for delivery, visiting clients, or airport pick-ups, you can buy a vehicle that is four years old or that has clocked 50k miles on the odometer. By the end of the 4th year, the vehicle will have depreciated more in value than performance, so with a couple of touch-ups and dents buffed out, the vehicle will be as good as new.

Maintenance

As the vehicle gets older, its maintenance increases because even apart from oil and filter changes, there are lots of parts that wear out and need to be replaced. Taking this additional cost into consideration, you might want to drop the idea of buying a used vehicle. But it doesn’t have to be that way.

To start with, you can buy a low maintenance car, such as a Honda or Toyota. But if you are looking for a dash of luxury without having to bear the hefty maintenance cost, then buying a mid-size Volvo sedan can work really well for you.

As far as repairs and maintenance are concerned, you can buy discounted auto parts online from partsgeek.com.

Peace of Mind

Your business vehicle is going to run almost every day, which means the longer it stays on the road, the more likely it is to get into a fender-bender. No matter how carefully you drive, you cannot avoid bumper scratches once in a while, especially when you are driving frantically to work or on your way back home to a sulking wife.

Compared to a brand-new vehicle, an older vehicle does not lose its modest grace with a scratch or two. It grows on you eventually. Whereas having a scratch or dent on a brand new car looks ugly, and you can’t help but have to get it fixed.

Brand new appeal or peace of mind – the choice is yours.

Recoup Your Investment

A car loses most of its value within the first four years. After that, the depreciation curve becomes linear. That means when you buy a four-year-old car, it has already been depreciated so much that it won’t lose any significant value further. After driving for another 4-5 years, you can sell the car without taking a deep financial cut.

On the other hand, if you are thinking long-term, say 15 years, then buying a brand-new car is beneficial.

Final Thoughts

Whether you buy a used or a new car, always remember that your business is the main priority. So, don’t let your emotions interfere with your decision of buying a business vehicle.


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by Harvey Carr // Harvey Carr is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.