A company car requires considerable capital expenditure. Before you head to the dealership, it pays to do your research.
What factors should you address when making your decision? Here are seven points to consider when choosing a company car to get the highest return on your investment.
1. The Big Picture
Please begin your decision-making process by taking a look at the forest before examining individual trees. What do you need the vehicle for? There’s a considerable difference between picking a rugged work truck for use at construction sites and selecting executive transportation.
You also need to choose between a new and used vehicle. Here’s a good time to call your accountant — they can run numbers to address how depreciation affects your business’ total costs to make the wisest buying decision. When setting your budget for a company car, the initial sticker price doesn’t give you the full expense picture.
2. Taxing Matters
Yet another reason to consult with your accountant when choosing a company car again revolves around depreciation. The IRS caps depreciation at $25,000 for SUVs and vehicles with gross weights above 6,000 pounds.
However, if you take bonus depreciation in the year of purchase — a benefit improved by the Tax Cuts and Jobs Act — there is no cap. In some cases, as with mid-sized trucks, the tax classification could influence the choice of vehicle. For example, the 2018 Chevrolet Colorado crew cab is over the weight limit, but the extended cab is not, a difference that can mean hundreds at tax time.
3. Fuel Economy
Maybe you think of yourself as a plumbing contractor or publisher, not a leader. However, as a business owner, you influence societal trends — and you want to be on the right side of history if you want to remain viable.
You may have noticed that protecting the environment is one of the most urgent international issues, resulting in considerable pressure on business owners to adopt eco-friendly practices.
Why not embrace the opportunity to market your company as a sustainability trendsetter by opting for the most fuel-efficient vehicle available — including a hybrid, if possible? Such choices have considerable benefits to your bottom line besides establishing your reputation as a conscientious company. You’ll also save a bundle at the pump.
4. Maintenance Costs
Before you head to the dealership, please avail yourself of the VIN search tool provided by the U.S. Department of Transportation to show whether that model was affected by a vehicle safety recall in the past 15 calendar years. While it won’t indicate whether an individual car was repaired, it offers valuable insight into potential trouble down the road.
You might consider maintenance factors when deciding between new and used. While new cars frequently have fewer problems, slightly used models offer the advantage of having been road-tested and proven.
5. Overall Styling
As much as you need to address practical matters when choosing a company car, you also want something that pleases your aesthetic sense. Hey — you worked hard to build your business. If part of your motivation was to own a Tesla, and you now have the means, reward yourself for your efforts.
6. Accessibility Features
Your company should value inclusion — people with different abilities bring unique perspectives to the table that can offer valuable insight into what your customers need most. You also don’t know what the future may bring, and choosing an accessible vehicle now could save you future cash.
For example, an employee injures their leg, and driving to the job site is an essential function of their position. If your company car already has wheelchair accessibility, they might return to the field sooner.
7. Bells and Whistles
Some features that seem like fluff offer considerable benefits. For example, built-in video screens aren’t just for families sick of hearing, “are we there yet?” They can help you and your team review critical information while on the road to a conference.
Details like remote start and heated seats also save you time and money when winter weather makes commuting between job sites a misery. Please consider these details before making your investment.
Consider These 7 Points When Choosing a Company Car
A business vehicle is a significant capital expenditure. Before making your investment, consider these seven points when choosing a company car.
Filed under: Uncategorized