Choosing the Right Vehicle for Your Business

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When you’re just starting out you’re faced with so many choices about every aspect of your business, and choosing the right vehicle can fall to the bottom of the priorities list. But it shouldn’t, having the right wheels can really help you negotiate those early days and hit the ground running. The sheer array of options can seem baffling, so whether you need one vehicle or a fleet – here’s a guide to help you narrow down your options and make the right choice for your business.

First Steps

The first few decisions you need to make should be fairly straightforward. You should first assess the needs of your business, so that the vehicle you choose will maximize efficiency, rather than being an unnecessary drain on resources. The most fundamental question to ask yourself is how many vehicles you actually need. Sure, more vehicles could potentially mean increased efficiency or productivity, but it would also require more initial capital outlay, as well as an increased ongoing financial commitment – so you’ll need to weigh up these opposing factors and get the balance right. For a business that’s just starting out it’s wise to stick with just one car to start with – you can always add more if you need to further down the line, but at the beginning when all your resources are vital it’s wise to keep spending down. In buying a car for an employee, your business would also take on all the risks of ownership such as depreciation, repairs, servicing and maintenance costs. So to make these risks worthwhile, it’s vital that the car is providing optimum added value to the business. You also need to think about whether you’re going to need a car or a van; if you’re just using it as a run around a car is probably best, whereas if you’re going to be transporting kit or merchandise a van is much more versatile.

Consider Leasing

Once you’ve decided what your business’s needs are, you need to firm up exactly how much you’ve got to spend. Fixed costs are easiest to mange, especially in the early stages, so with this in mind it’s usually a good idea to go for a car no more than three years old if purchasing – otherwise maintenance costs can increase drastically in a relatively short period of time. Leasing is also a great choice to ensure costs remain fixed as while they do require a small initial outlay, the monthly cost will remain fixed during the period of the lease. This approach can also be much more tax efficient – a small business could potentially claim back 100% of the VAT paid if the vehicle is used solely for business purposes. Leasing also allows your business to avoid being saddled with a depreciating asset, as would be the case if you bought a car or van outright.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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