Are you looking to invest in another company car? Then read on to learn our three tips for saving money on your car costs, whether it is the initial outlay involved, the lifetime costs of running the car or how you can best manage your fleet moving forward.
When buying an additional car for your business, consider the relative benefits of a new versus a second-hand model. Given a new car depreciates almost as soon as you drive it out of the showroom, buying a car that is a year or more old will dramatically reduce your initial outlay. Consider also, the lower cost of running a car with a smaller engine or manual cars over automatics. If you are looking to buy a second-hand car, consider buying it towards the end of each financial quarter (March, June, September and December) – when dealers are most eager to meet their targets.
As an alternative, you might want to consider leasing, as this has some advantages over buying, with monthly payments usually lower than the cost of a car loan and no maintenance costs involved. However, be sure to check the small print, as there may be a cap on mileage and termination fees should you wish to cancel the agreement. Remember too, that you’re unlikely to be able to customise a lease car. Car sharing is an option for small businesses which has some advantages over buying, with fuel and insurance often included in the rates.
When looking to buy an additional car for your business it is not merely the initial outlay you need to consider, but the ongoing costs of running the car too. When considering the whole life costs of a car, there are a number of factors you need to consider:
When buying an additional business car give a thought to the fuel the car will run on. Which type of fuel would prove most economical for your business, petrol, diesel or a hybrid vehicle? Diesel has long been considered the most economical fuel for cars, but with the Volkswagen emissions scandal still fresh in our minds and recent speculation in the news about government plans to scrap diesel cars – their future looks uncertain. So you might want to look at other options such a plug-in or conventional hybrid. Bear in mind the length of the journey the car will usually be undertaking – hybrid vehicles are particularly well-suited to companies that do a lot of local, shorter journeys, rather than fewer, longer journeys. Consider if the model you’re looking to buy has low C02 emissions? Check this carefully, as different levels of emissions are taxed at different percentages.
Once you have decided on the type of fuel with which you want to run your company cars, consider how you will pay for the fuel your company uses. Fuel cards can provide an efficient means of paying for your petrol. They can also help you accurately track your fuels usage with regular online reports. There is a range of providers available and a number of comparison websites that you can visit to weigh up the costs and benefits of the various fuel cards available.
Also, to save further on your fuel costs, encourage fuel efficient driving in your company. The Energy Saving Trust has a range of hints and tips for driving in a more fuel efficient manner, encompassing such things as driving smoothly, using the gears correctly and lightening your load. Switching your engine off rather than leaving it idling in traffic jams was another tip.
Insurance will be a significant component of your company car costs, so don’t just automatically renew or extend your current policy. Shop around and look at the range of insurance deals available for your company car. If your company owns a number of vehicles, then look into fleet insurance. Talk to an experienced insurance advisor and get an insurance quote for your company car today. When considering your company car insurance be sure to consider your specific business needs, for instance, do you need insurance that covers your employees driving in Europe? What does your insurance cover if something does go wrong? Would you get a replacement car if one was damaged?
What breakdown cover would work best for your business and what does it need to include? From a home start service to roadside assistance, accident management to help with reaching your destination, the options available are many and varied.
Another factor to consider is the ongoing costs of servicing and maintaining your company cars, be mindful of the fact that certain makes and models cost much more to repair than others. Which? has found that though the cost of routine repairs for diesel versus petrol cars is similar, diesel cars tend to be a little less reliable and when something more serious goes wrong, repairs can be significantly more costly. Diesel cars are also prone to repairs that other cars are not, such as the diesel particulate filter (DPF) becoming clogged and needing replacement, which can be expensive.
To help you make well-informed decisions about your company cars moving forward, consider installing a telematics system in your fleet. Though telematics systems have typically been used by large corporations, they have advantages for small business too. Telematics systems can give you useful business insights and ensure you have accurate statistics regarding fuel usage, route information, location, speed and insights into driving behaviour. There are a number of telematics systems available that can be integrated with your other business applications too, helping you to better manage your day to day workload and give a better service to your customers, such as real-time delivery information. When installing a telematics system in your business be sure to communicate why you’re doing this to your colleagues and explain the benefits both to them and to the company – they could be used to counter false claims made against your drivers for instance. Also, consider setting up an incentive scheme for your employees that rewards good driving.
So there are three broad factors to consider when buying a car for your business, from the relative benefits of buying a second hand over a new car to the ongoing costs of running a car. Finally, the insights you could gain by installing a telematics system in your cars, helping you to run a more efficient company fleet over the coming months and years.