Business

Buying a Car for Your Business

Buying a car for your business can provide some great benefits. You can use it for deliveries, to drive between work locations, and to market your business. A company car comes with many tax benefits. But a car is a major purchase, so take your time before you choose one and sign on the dotted line. Here are five tips for buying a business car.

1.  Decide Whether to Buy or Lease

If you buy a car, you may need a loan; if you lease, the cost of the lease may go down with time. The major benefit of buying a company car is the tax advantages. Financial experts say it’s important to prequalify car loan because dealerships will always try to beat the deal you initially got. Prequalification can help you estimate the rates you might get when shopping for a car. Be smart and compare interest rates to determine the best offers. This will ensure you get the best deal.

The initial costs of buying and leasing a car vary. If you buy, you’ll need a down payment; if you lease, you’ll only need the first month’s security deposit. When you buy a car, you can put depreciation and mileage expenses as tax deductions.

2.  Consider Buying a Used Vehicle

New cars are expensive and out of reach for many car shoppers, but there are very many used vehicles that are affordable. You can save a lot of money by buying a secondhand vehicle, up to $14,000 according to Experian Automotive. But have an experienced mechanic inspect the vehicle to ensure it has no major issues. You can also buy the car from a private seller and save.

3.  Prioritize Fuel Economy

Fuel economy can help your company save money, which is the goal of every business. If the vehicle will be driven most of the time–to make deliveries or for marketing–get one that’s fuel-efficient. It’s also worth mentioning that a fuel-efficient vehicle may be eligible for certain tax savings. You can equip it with telematics programs that optimize routes with GPS features and promote fuel economy. It should be noted that bigger and heavier vehicles have higher fuel and maintenance costs than smaller cars.

4.  Make Sure It Has Great Car Tech Features

Get a car with features that make business operations run smoothly, such as telematics for fleet management, GPS, and other features that help minimize depreciation. Telematics has a lot of benefits. The programs track vehicle locations and help minimize distracted driving. Some insurance firms offer telematics programs and give good discounts to businesses that sign up. Take advantage of them.

Buying a company car isn’t easy because there are lots of things to consider.Take time to choose a great vehicle with great features. Sites like Kelly Blue Book are excellent resources for any make and model. You can research the cars you’re interested in buying then visit a dealership once you’ve made up your mind.

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