On buying a company car

drivingDepending on your situation, having a company car can either be an unnecessary luxury or an indisputable necessity. How do you know which camp you fall in?

Reasons to have a company car

If you or your employees do a lot of driving for work-related purposes than you should be considering the merits of buying a company car, especially if the driving requirements are not going to stop ion the foreseeable future. This is especially true if you find you are using your car more for work-related reasons than personal reasons.

Having to drive for work isn’t necessarily enough of a reason to buy a company vehicle, but if your personal vehicle isn’t properly equipped for your business purposes than it certainly makes the case stronger. If you have to transport people, deliver goods or load equipment than your vehicle needs to be up to the challenge.

Also, you might be able to take advantage of the tax breaks that come with having a vehicle for your company.

Reasons to not have a company car

No matter how useful, a company car is still a large expense, especially for a small business. That is of course the main reason against buying a company car. If you are already struggling with your cash flow, be weary of adding further strain with car payments.

You also need to think about how long you would need the car. If you don’t see yourself needing it for five years or more than you could consider leasing a vehicle rather.

Tips for buying a company car

Let’s assume you do need a company car and you can afford it. First of all you need to choose the right car. Perhaps you just need a small, fuel efficient car to attend meetings, or maybe you need a heavy duty vehicle as a work horse.

When the time comes to buy the vehicle, you need to finance it in some way. Remember that there are indeed business vehicle finance options, which is likely to be better suited to your situation than the finance plans dealerships offer to consumer buyers.

Finally, remember that you need to put the car under the business name, not your personal name. Not only do you want to be able to benefit from tax cuts, but it can help protect you from liability in the case of a collision.