How to Choose the Right Car for Your Small Business

If you're running a small business, having a car can bring you more growth opportunities as well as help cut costs. Using public transport or cabs for business can be tedious and time-wasting, especially if you're constantly moving around. Also, this option is not economically viable if you always have heavy stuff to transport. That's why buying a car for your business could be the very decision on the fast path to success.

Why your business needs a car

There are various reasons why you might want to buy a car for your small business. They include:

• Transporting goods to your premises or making deliveries to customers
• Helping your customers/clients commute in the course of doing business with you
• Improving your professional presence – moving around quickly and more efficiently
• Commuting to meetings with clients and business partners
• Marketing your business brand – branded car

However, you don't just walk into a showroom and take the first car you see. That would be a terrible mistake. You have to consider your business needs a little and then weigh your options in terms of what kind of car would suit you. This way, you can be sure to choose the right car for your business. Here are a few essential tips to help you choose a perfect car for your small business.

Choose a car that your business can afford

The first thing to do is to look at your budget and decide the cost range of the car you want to buy for your business. The cost goes hand-in-hand with the type of car needed. You can't buy a truck if all you need is to move around between offices. Being a small business means you don't have a lot of cash at hand, and that could be a constraint if you don't take your time to assess your true needs and the budget available.

The affordability of the car you want will be subject to the type of financing method you choose. As a reminder, don't choose an expensive car even if you have flexible financing methods, especially if the car in question doesn't suit your needs. Don't choose an SUV for transporting heavy items just because you can afford it.

Pick the right car model

Do you want to move around meeting clients and inking deals? Choose a small car or an SUV (in case you need to carry multiple people or reach off-road areas). Do you want to ferry loads? Choose a truck. Do you want to launch an active marketing campaign around the neighborhood, towns, and cities? Choose a van. This is how smart business works. You choose a business car depending on the type of job it will be deployed to do. This also influences the size of the car you choose.

Consider car features

Cars come with various features, and your business needs should dictate the kind of features that should be present in the car you choose. First of all, road safety is paramount. Modern cars come with GPS navigation and technology to keep them in their lanes. Other basics include airbags, good brakes, and safety belts.

Many features are present in most modern cars, but you should check to make sure the model you pick has everything you need. Prioritize features that help meet your business goals over any add-ons that are just nice to have.

Explore financing options

Depending on your preference, you can get the car you want for your small business through various financing options.

• Cash: If you have enough cash, you can choose the car you want and pay cash. You get to fully own the car immediately with no further commitments to the seller or money lender. However, you must ensure that the car you buy with the cash you have suits your business needs. You don’t want to buy a small car when your business needs a truck just because you have enough cash to cover the sale of the car.
• Leasing: If you do your math and the costs of owning a car exceed that of leasing, you may opt to lease. Leasing allows you to choose a contract that covers all your car's maintenance and service needs. That means the annual check-ups, roadside assistance, repairs, and tire replacements are included in the package. Leasing also lets you choose your new car from a wide variety of the latest makes and models.
• Car loan: Buying a new car requires a lot of money upfront, so financing can be a great option, especially if you are a small business. There are many methods to ease the burden, but one of the most common financing options is to apply for an auto loan. This type of loan product can help you finance the purchase of a new car, truck, or any other vehicle for use in your small business.

Mind the fuel costs

Fuel economy is a major determinant when gauging the profitability or expenses that go into owning a small business car. The fuel cost must not exceed the benefits generated through the car. For example, the cost of leasing or hiring a car for a specific function must be higher than the cost of fueling and maintaining your own business car.

Fuel expenses also depend on the type of car. A small car will consume less than an SUV or a van. Choose the car depending on your needs. You don't need to drive a big truck to meet customers.

You might also opt for a hybrid car brand to reduce fuel costs by utilizing the electric component. As a matter of fact, a lot of the cars on the road right now have hybrid engines. This makes sure that you never find yourself stalling on the road for lack of fuel. You can always switch between gas and electric functions.

Maintain your business brand through your car

Sometimes, a car can be used to represent a business brand. You don't want to appear cheap if you're dealing with high-end customers. If business is good, you could consider buying a classy car to match the brand identity level that your customers associate with.

A business car can also be branded on the outside to double up as a marketing tool for your business. When you move around, people notice the car and your business brand. Mostly, the branding includes the products sold by the business. People get to notice your business and its products through the branding of your business car. For such purposes, a van is the most appropriate car.

Purchase the car through your business

If you plan to use the vehicle solely for your business, buying it through your company can help you get the most tax benefits. You can claim tax relief on running costs, including road tax, fuel, insurance, and servicing. Your business can also deduct depreciation and other expenses like car loan interest, which individual car owners can't.

Negotiate for the best deal

Negotiating is the real deal when it comes to purchasing anything. Sellers will always quote a markup that allows for some negotiation. It saves you money that you would otherwise lose if you paid without negotiating.

Besides that, it's a great idea to check around various sellers/dealers and settle for the one offering the best deal. You want to save as much money as possible to use it in other business expenses like fueling the car.

Should you buy a new or used car for your small business?

One of the first decisions to make when shopping for a business car is to determine whether to buy a new or used vehicle. It requires you to weigh several trade-offs and can easily get overwhelming. Here are the pros and cons of either option to help you make the right choice for your financial situation.

Pros and cons of buying a new car

Undeniably, a new car can be customized the way you want it. However, it usually comes with higher expenses, which can break your pocket, particularly considering how fast new cars lose their original value. 

Pros of a new car

• You can customize your car to your liking
• New cars are less likely to have mechanical issues early on
• New vehicles have the latest technology and safety features

Cons of a new car

• They are more expensive
• New cars usually cost more to insure
• A new vehicle is likely to experience high depreciation 

Pros and cons of buying a used car

A used car may not have a new vehicle's amazing look and magical smell. However, it can save you some dollars while retaining more of its value.

Pros of buying a used car

• Used vehicles are typically more affordable
• Insuring a used car is generally cheaper
• A used vehicle experiences less depreciation

Cons of buying a used car

• Used cars might not have the latest technology and safety features
• You have to check the car's history before buying it
• A used vehicle might need higher maintenance costs

Summing it up

Choosing the right car for your small business can have a great impact on your everyday operations and budget. Therefore, it's a journey worth taking with care and ensuring you make an informed decision that will benefit your business in the long run. Use these tips as your roadmap, and you will maximize the profits and benefits of your small business.