Choosing Company Cars: 5 Tips For Business Owners

Updated on

Whether you run a small business or are in charge of a large fleet of vehicles for your company, choosing the right business vehicle is no easy task. In general, the process is comparatively similar to buying a car for personal use. However, there are a few extra variables that you need to take into account, especially if you value your image and have clients to impress.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2021 hedge fund letters, conferences and more

Tips For Choosing A Company Car

For the most part, you should strike a balance between affordability, reliability, and aesthetics, but of course, each company has different requirements that must be considered. With that in mind, here are five tips to help you find the best option when choosing a company car.

Leasing vs. Buying

First, you need to figure out whether you should purchase a vehicle or lease one. There are pros and cons for each of these choices, and which one you decide ultimately depends on your circumstances and your finances.

Many businesses choose to lease as it’s a convenient solution due to all of the costs being covered in the lease price. For example, things such as maintenance, repairs, tires, and roadside assistance are all usually included in the monthly fee, which means you don’t have to worry about anything going wrong with the vehicle.

However, leasing is often referred to as “dead money”, as you don’t receive any asset for your payments. At the end of the contract, you give the car back, and you have nothing to show for your investment.

On the other hand, buying a car is much more time-consuming as you must take care of all of the extra costs yourself; however, the asset belongs to your company, and you can even offset some of the expenses against your taxes.

Consider The Practical Uses Of The Vehicles

In many ways, practicality is more important than the visual aspect of the car. You need to ask yourself what the vehicle will be used for and what and what your intentions will be for each vehicle.

Is the vehicle going to be used for your employees to drive around the city center? If so, you might want to opt for a small city car that’s efficient and has good gas mileage. If your employees will be driving across the country on long road trips, maybe it would be better to shoot for something more luxurious to provide added comfort.

Opt For A Reliable Model And Do Your Research

If you decide to buy instead of lease, you better do your due diligence and research different options before making your final decision. There are an awful lot of cars to choose from, and some are better than others when it comes to reliability.

Let’s face it, if you are going to be responsible for the repair and maintenance fees, it’s within your best interest to opt for a reliable model that isn’t susceptible to breakdowns. Brands like Citroën, Peugeot, and Alfa Romeo have all earned a reputation for building cars that tend to fall apart a little quicker than they should, so you might want to be extra careful when considering cars from those companies.

On top of this, if you’re buying a used car, you need to ensure the vehicle is up to scratch and will not cause you too many headaches in the future. The best way to do this is to conduct a thorough search of the vehicle's vin code history. This will give you access to a comprehensive report on information such as:

  • The correct mileage
  • Past collisions and recalls
  • Complaints and issues
  • Full vehicle specifications

Think About The Aesthetics

In some respect, the car you and your employee's drive says a lot about your company. It represents your brand, and as such, you should look for a vehicle that matches the image that your business tries to portray. Let’s be honest; you don’t want your employees turning up to a client meeting in an old banger. Similarly, if you are the head of the charity, it’s not exactly a good look to drive around town in a brand new Ferrari. Keep your brand image in mind and choose something suitable.

Furthermore, a fleet of company cars offers an excellent opportunity for marketing exposure. You can opt to get business cars painted in your company branding colors or even get logos etched onto the side of the vehicles.

Final word

There are a lot of things to consider when choosing the right company car for your business. With that said, each company is different, and you need to find a model that suits your company's image that is also both practical and reliable.

Finally, it’s worth researching the potential benefits of electing for an energy-efficient model (or even an electric car), as some governments and local authorities offer tax incentives for vehicles with low carbon emissions. Plus, it will save your company a lot of money on fuel costs in the long run.