It’s not always easy deciding if company vehicles are right for you, especially when you’re a start-up. Purchasing a vehicle can be relatively costly, depending on your circumstances. But there are opportunities that it could open up within the business which could actually benefit you financially.
The most important thing to do is weigh up the pros and cons and decide if it is the right decision for you. We take a look at some of the benefits and negatives that may help you decide if purchasing company vehicles will help your business.
Allows for more flexibility
When you purchase company vehicles it can give the business more opportunities to be flexible, particularly when you have a mobile sales force.
Often offering a mileage or expenses plan can cause extra administration within the business. If you’re a relatively small start-up, this could involve regular additional work for your team. Whereas with company vehicles purchased, documentation is normally only a one off.
Owning company vehicles may be easier for employees, rather than relying on their own transport. Especially, if they have travel on a regular basis. The price of public transport is also going up and using company credit cards can add extra interest too.
It may be worth looking at your current transport costs within the business. Then you can compare that with the cost of purchasing and running your own vehicles to see if you can make savings.
An attractive employee benefit
It has been said that a lot of employees choose jobs based on their benefits package. Providing a company car can be a great way to attract higher calibre employees.
It may also be a good incentive to drive sales and reward employees. Offering benefits could also encourage employees to stay for longer, if could be offered to employees after committing to the company for a certain period of time.
Use your vehicles as brand awareness
Quite often you will see business with company vehicles with their own branding on them. Having your own vehicle fleet around the local area or even national could give you extra advertising without having to cost you much.
Vehicles can easily be wrapped with branding, which could get you some more traction when it comes to attracting leads into the business.
One of the downsides to having company vehicles is the ongoing maintenance that they require. This can be quite costly, particularly if you are dependent on employee behaviour.
To monitor behaviour, keep your fleet safe and keep track of your fleet, you could invest in telematics. This type of software helps track the health of the car whilst observing patterns in driving such as speed limits and braking. This may help to mitigate risks and cut the cost of repairs.
You may need to invest
Buying company cars does involve an upfront cost. This may not be in the budget of every start up. It may mean that you need to take out a loan or get vehicles on finance in the interim.
It’s best to set your budget for the year and also include depreciation, compared with the cost of employees driving their own cars, public transport options or even leasing.
When employees are driving company cars, it can increase the risk of damage to your fleet. Especially if they have the freedom to use the vehicles outside of working hours.
In order to decrease that risk, it may be worth looking at getting motor fleet insurance. It can help to protect you in the event of an accident and cover the cost of repairs. Some insurance policies will also provide courtesy vehicles if one of yours if off the road.
This way, you can continue business and cut the costs down of repairs.
If you are looking into purchasing company vehicles, then fleet insurance is definitely something that should be on your radar. Whilst there are both pros and cons, it will very much depend on the nature of the business to whether you will need to invest in business vehicles. If in the long run it can help you keep control whilst also cutting costs, it may be good for business.