Published on June 23rd, 2020 | by Ben Hartwig0
The 5 Tips to Buy a Team Vehicle
If you own a business, buying a car can be a daunting process. There are so many considerations to grapple with. If you are a large enterprise with deep pockets, it may be easier. You could even outsource the entire process! But whatever the size of business you are, you should find the following 5 tips helpful.
Deciding Between a Used or a New Car
In addition to budgetary considerations, there are some interesting tax implications when you’re in the market for a car, whether old or new. For example, there are tax breaks for buying electric vehicles. There are also substantial excise taxes that could apply. Buying a used car or opting for a used one is a matter of preference. Here are a couple of other considerations.
- Ensuring your peace of mind. If you want to have more confidence in the car you buy, a new car could give you that. Brand new vehicles are more reliable than used ones. The wear and tear on used cars can be substantial. New cars don’t even have to be assessed by a mechanic. Also, with most new cars, if you have a break-down you can get it fixed under factory warranty.
A good tip here is to examine the warranty that new cars offer before making a purchase. Since the car will be used for business, reliability may be a top priority. However, used cars are a lot more reliable than they once were. Also, there are ways to protect against some of the disadvantages with pre-owned vehicles.
- Exploring financing options. For new cars, cash rebates and other incentives are typically offered by automakers to lure buyers. It’s also been shown that new car loans have better interest rates. Don’t be afraid to negotiate, even as a business owner buying a team car. You stand a good chance of saving thousands of dollars after you bargain and apply the incentives.
Budget & Loan Considerations
A good business owner knows the importance of budgeting. Even if you can buy a car with cash, you need to understand your financial objectives and limitations. However, most businesses will have to rely on loans to buy a car. Unfortunately, it can take a couple of years to build up the credit required for an auto loan. This can be problematic for newer businesses. Here are some useful tips to get a high credit score:
- Pay your business bills on time. A record of timely payment has a positive effect on your business credit score. Early payments are really the only way to qualify for a high Paydex score.
- Don’t use too much credit. This is particularly difficult for businesses, considering all the overheads and expenses that have to be paid. However, it is best to limit your use to 20-30% of available credit.
- Manage your public records. There are a few sure ways to lower your credit score. These include court judgments, liens, and bankruptcy against your business. Do your best to avoid or manage these. For example, where there’s a lien, pay the debt as soon as you can and organize to have the lien released.
Research Used Vehicle Values
Buying a new vehicle may be a smart idea. However, as earlier indicated, used cars are a lot more reliable than they used to be. In general, vehicles are bad investments. New cars, in particular, depreciate by up to 30% by the end of the first year you buy one. So, you may as well consider buying a used car instead. There are direct and indirect ways to research a car’s value. Here are some tips :
- Deal with authorized dealers only. Most dealers are required to provide warranty information under state and federal laws. This guarantees that the car will pass safety and emission inspections. Make sure you get this warranty information in writing and upfront. This is an indirect way to ascertain a car’s value.
- Get the car inspected. This is another indirect way to find out what a car is worth. It’s also a no-brainer. Unlike new cars, you need to have an independent way to verify that a car is road-worthy. A good and trusted mechanic should check for mechanical issues. There’s not much value to be placed on an unreliable car. You can either decide it’s not worth buying a defective car or use the defects to negotiate the price.
- Work out the book value. A more direct way to work out the value of a car is to research its book value. This is the amount that a car of its year, model and make is worth according to an auto dealer’s guide. These values are typically compiled by polling numerous dealers.
- Vehicle history reports: This is a quick and easy way to find information on a car. Vehicle history reports detail the number of previous owners and how many accidents the car has had. This can be an accurate way of determining the value you will place on a car.
Shopping Online For Your Team Vehicle
The internet has provided an alternative way for businesses to buy cars. This is certainly unconventional, but maybe worth a try. It means it’s possible to purchase a vehicle without dealing with a salesperson physically. But before you search online, be sure what your business needs are. We will expand on this at the end of this article.
Let’s turn back to online car shopping. Use Car sale websites can provide you with a variety of manufacturers, reflecting different price points. You can also use these sites to narrow down your choices. Then you can simply email the sales departments of the dealerships to ask for quotes.
When shopping online, look out for the return policy. Some of the online car-buying services actually offer this. It can give you peace of mind if you’re a bit nervous about buying a car on the internet. We’ve mentioned vehicle history reports and independent mechanical checks. Well, these can also be utilized to allay your fears. They are especially relevant to online car buying.
If the reason you want to shop online is to avoid interacting with a dealership, you may not be able to do a test drive. So, you may have to be flexible here. Test drives require some form of physical interaction with the sales staff. Also, to begin with; not all online car sites even offer test drives. For new cars, you’re able to test drive at a local dealership. However, it won’t be the exact one you want to buy. For a pre-owned car, you’ll be taking quite a major risk if you cannot test drive nor have a good look at it.
What Type of Car Suits Your Business?
The final tip is a good way to conclude. You need to take into account your business and what type of car will suit it. Beauty or design brands may require cars that are aesthetic and would rival their competition. Other businesses are rough and tough, requiring resilient and functional vehicles. Some company cars are suited for door-to-door marketing or shuttling between offices. Have a clear understanding of the best type of team car to meet your business needs.
The decision on what car to buy is a business decision like any other. As a business owner, you plan, take risks, and budget on a daily basis. Trust your business acumen to make the right car buying decision for your team. The tips in this article only serve to complement your decision-making skills!