There are many good reasons to buy a car for your business. It can simplify logistics, make certain tasks easier, and it comes with tax benefits, as you can deduct maintenance expenses and even the cost of vehicle depreciation. However, finding the right car to meet your business needs can be quite tricky, especially if you are on a tight budget. Here are some tips that can help you choose your first business car.
1 – Be smart with the budget
One of your first tasks when shopping for a business car will be figuring out how much you can spend on one. Whether you’ll be buying the car outright or applying for a car loan, it’s important to avoid both overspending and underspending.
You don’t want to get a car so expensive that it will put a strain on your business finances. However, buying an overly cheap used car may end up costing you in the long run. Remember that you need to factor in not only the cost of maintaining and insuring an old car but also the opportunity cost associated with not being able to use the car because it’s being repaired. Also you need to check if your car already has a window seal because it helps to keep out unwanted things from the bad weather.
If you can’t afford a satisfactory option right now, you may be better off leasing a car until your business is bigger.
2 – The company should own the car
Make sure the car is registered as belonging to the company, not you. That’s generally the better option when it comes to tax benefits. It also gives you access to corporate car insurance plans, and it limits your liability in case the car gets involved in an accident or some other legal trouble while being driven by employees.
3 – Check what other pros are using
One of the trickiest parts of choosing a business car is picking the right model. Do you need a car or a van? How big should it be? Does it have to impress clients? Make sure you go over exactly what you need out of the vehicle. And for good measure, do some research to see what cars other professionals in your field are using.
You can find that information by asking around your professional network or by searching online. Other pros will have recommendations on what types of cars work best, as well as which makes and models you should avoid.
4 – Look for news about the car
Once you start looking for car options, try to do some research before putting money down. As this Chevy lemon law page shows, it’s not uncommon for cars — even relatively new ones — to have common manufacturer defects and other issues that aren’t widely reported upon. Looking for news about the car you want to buy is a good way to see if that car model has a history of causing problems or if it was subject to a recall in the past.
5 – Check the insurance rate
As mentioned earlier, older cars often cost more to insure. Imported cars and cars whose parts are hard to find may also cost more to insure. On top of that, there are differences in rates between individual and commercial insurance policies. Given that, it’s a smart idea to check insurance prices before buying a business car. Otherwise, you risk having to deal with a much bigger insurance bill than expected, and that’s a cost that adds up over the years.