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Should Your Business Buy or Lease its Vehicles?

businesswoman with new car

As a business owner, commercial vehicles are integral to the trade. Using your own for company purposes can also cause problems for insurance, especially if your vehicle gets damaged while it’s used for business.

There are many providers out there that offer vehicle leases. But in reality, leasing comes with multiple disadvantages, including:

  • Being more costly in the long run – It may look like you’re spending less, but think about how you can be spending money to own the vehicle instead of renting one. If you were to lease a sedan for 6 years vs. buying one with financing, the difference is less than $1,000 a year.
  • Unable to modify the vehicle to your professional needs – Renting a car means you must keep it in the same condition as you got it. Adding logos and branding, and other kinds of customization are important for marketing your business and are not an option when leasing.
  • Having restrictions with scheduling – Using a rental means eventually giving it back, which will inevitably affect your operations. By having your own, you have the freedom, flexibility, and control over the vehicle’s availability.

What Kind of Vehicle Should you Get?

A good place to start is to explore what is available. Here are the different types of commercial vehicles and their advantages.

Lifted Trucks

Trucks are one of the most common commercial vehicles, depending on the nature of your business. They can haul big items or large quantities of goods, but a lifted diesel truck has more advantages:

Easily handle road obstacles

Because they’re made for hauling, truck suspension is usually good for handling potholes, which can damage other vehicles. . Deliveries even in country roads and adverse weather conditions are easier with a truck.

Provides better visibility

There are times when the weather or other factors can compromise our view of the road. However, being higher off the ground means increased visibility.

When you have this advantage, you have more time to notice obstacles and avoid them. At the same time, the vehicle’s height makes you more visible to other drivers, especially in the dark or during inclement weather.

Increased towing ability

When it comes to towing, a lifted truck provides a safer experience because of its safety margin and weight advantage against the offending load. This means that you don’t have to worry about your truck swerving while towing heavy or large loads.

SUV

Sport utility vehicles (SUV) are a common pick for commercial cars in many industries. Its biggest advantage is its interior flexibility. Most have seats that can be rear-folded or even taken out completely. This allows you to alter the vehicle according to your goal.

If you often transport people to a worksite, it is more time-and-cost-efficient to use one vehicle. An average SUV has a seating capacity of eight to nine adults.

If you need to relocate tools or equipment, you can simply adjust the seats and maximize space.

It’s important to note that these mid-sized vehicles are more suitable for smaller jobs. When you do need to transport more equipment or passengers than usual, just plan ahead to make things efficient.

 

suv moving

Commercial Cars

A car is a good choice if you don’t have the need to transport large quantities or groups of people. You’re sacrificing cargo space and towing capability, but do you really need it? Depending on your industry, you might not even maximize these features at all.

However, these are replaced by the true advantages of a car.

Being easier on the pocket

Since business is all about saving your hard-earned money, it’s noteworthy that a car is more affordable than its larger counterparts. A medium sedan costs an average of $25,000, and an SUV will set you back about $33,000 on average. Cars also cost less with fuel, maintenance, taxes, and insurance.

Comfort and maneuverability

Vans, trucks, and SUVs are not known for their comfort or ease of navigation. Some people may even find them impossible to drive. At least with a car, you don’t have to worry about getting used to maneuvering around– parking and storagebecome much easier.

Other Considerations

But remember—the perfect commercial vehicle is the one that can meet all of your business requirements without being too expensive. Take the time to list your needs, do your research, and account for the fact that vehicles can depreciate over time, which can lead to some tax savings.

The Tax Cuts and Jobs Act (TCJA)  allows 100% first-year bonus depreciation for new and used assets, which include your company car.

Explore your options to make the right decision for your business.

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