If your company relies on vehicles for delivering goods, commuting to job sites, or conducting sales calls, choosing the proper vehicle for the job is important. We’ll cover some aspects to consider before you sign on the dotted line.
The type of commercial vehicles your small business requires likely depends on your industry. Here are some questions to consider:
Since most business-related vehicle purchases will be based on practicality and not impulse, the vehicle’s features must match your small business’s needs. Answering these questions can help you narrow the search for a commercial vehicle. And, because a vehicle can be a significant financial decision, you’ll also want to calculate the total cost of ownership, including the cost of commercial auto insurance, fuel, and other expenses.
Once you narrow down your options, experts recommend test-driving vehicles with a few of the employees who will be using them. If cargo space is a concern, bring along the items the vehicle needs to fit. For example, if you own a restaurant, will your catering supplies and delivery bags fit in the vehicle you’re considering? Test it out to be certain.
You have a few options for obtaining a commercial vehicle, including buying a new or used vehicle, leasing a vehicle, or converting a vehicle you already own from personal use to business use. Each approach has its advantages and disadvantages.
Converting: Using a personal vehicle you already own for business use is likely the most cost-effective option, depending on your business and personal situation.
Purchasing: Because new vehicles depreciate considerably after the sale, most experts advise against buying a new vehicle for your small business. In fact, vehicles with as little as 10,000 miles on them can be worth several thousand dollars less than a new car of the same model.
Leasing: If you’ve decided you don’t want a used vehicle, experts suggest leasing a new vehicle rather than purchasing it. This choice ensures you always have modern, reliable cars representing your brand.
Found a used vehicle that checks all of the boxes? Before you sign the purchase agreement, the experts at Wolters Kluwer recommend that you:
Here’s a checklist to help you evaluate a used vehicle.
Obtaining and operating a commercial vehicle can impact your small business tax situation. For example, according to Turbo Tax:
Talk with your accountant to learn how a vehicle purchase or lease will affect your small business’s specific situation.