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5 Things to Consider before Purchasing a Business Vehicle

5 Things to Consider before Purchasing a Business Vehicle

You’re on the hunt for a company car, and you want your purchase to be the best option. However, certain things won’t go your way if you aren’t careful with your choice. You’re buying an asset for your business, so you’ve got to be careful it stays an asset. Otherwise, you may be setting yourself up in the dangerous cycle of costly bills that’ll only hurt your company’s profit potential.

Guidelines in Buying

Purchasing a business vehicle means choosing the most affordable one that’s a worthy investment your budget can afford. It has to last you through the wear and tear of business use like deliveries and various transactions.

To guide you, here’s a list of things you must consider before buying.

Affordability

The vehicle you’ll purchase should be affordable and within your business budget. Otherwise, you may be hurting your business’ finances which will send you on a spiral of debt.

You may have to take out a car loan to pay for your business vehicle, but even the monthly amortizations should fit within your budget. Buying a business vehicle doesn’t necessarily mean going for the most expensive options.

Size of Vehicle

Second to budget is the size as this would depend greatly on factors like the purpose it’ll serve for your business. For instance, if you’ve got big and bulky deliveries like furniture, then you’ll need a vehicle withstanding heavy loads and with an extended car warranty in case of accidents. If your business caters to flower deliveries or food deliveries, then a smaller vehicle would suffice.

This is an important factor to consider as it’s not just the function being affected in this choice, but also the expense. Generally, the bigger the vehicle is, the pricier it will be.

Quality

Depending on the kind of vehicle you’re looking for, certain brands stand out based on quality. If you’re unsure, it pays to do your research as the internet will help you find resources leading to the right option. You can also ask for recommendations and insights from family, colleagues, and even expert mechanics who have a background in business vehicles.

When it comes to cars, quality has a lot to do with durability and workmanship, including the performance of the car itself over time. When you go for a vehicle with superior quality, you’re setting yourself up for fewer problems in the long run, and this is important given the expenses repairs might bring.

Availability of Financing Options

If you’re not going to pay the full price of the vehicle in cash, you’ve also got to consider the financing options available. This is crucial since a car business loan can set you up in the position of debt for the next three to five years. Even if your cash flow is good and stable, this doesn’t mean you should take your chances.

When you factor in your financing options, you can also find a credit provider that’ll have the least interest and overall better terms. Considering the state of your business for the next several years is significant because even if you may be doing well today, it doesn’t guarantee you’ll still be in the same positive position in the future. If your car loans are hefty, this can be dangerous to your finances.

Add-Ons

For a business vehicle, it’s acceptable to have necessary add-ons if it’d make the transportation more efficient. You’ve got to narrow down the suppliers or car dealers offering these add-ons and go for the cheapest ones. If you aren’t cautious, these add-ons might make the selling price escalate too much, where the expense becomes unbearable for you to pay.

For example, because you’re going to use the vehicle for deliveries, it’s a bonus to have a built-in navigation system in place. You may also want to add covers for pick-up trucks or opaque windows if you’re buying a van.

Whatever your add-ons are, be sure you’re upfront about this right upon your first meeting with the car dealer to settle how much you’re going to spend.

Conclusion

The list of factors mentioned when buying a business vehicle should be used wisely to guide in buying because there are many car options out in the market today. You wouldn’t want to make a mistake in purchasing, especially since this is for your business and not for personal use.

Make a choice based on the criteria above, so you’d be able to have the best vehicle for the services you’re providing.


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by Dirk DeBie // Contributor to Businessing Magazine.

Opinions expressed by contributors are their own.