Sorry, this probably won't be your company vehicle...
1. Leasing May Be Preferable to Buying
Assuming that you are going to be driving less than 12,000 miles a year, a lease may offer distinct advantages to your business. First, 100 percent of a lease payment can be deducted as a business expense. Second, leasing gives you the ability to trade in the car every couple of years, which may reduce maintenance costs. Finally, you can build equity on the vehicle, which may lower the cost of your next vehicle.
2. They Make Excellent Mobile Marketing Devices
Wrapping your car with the company's logo, phone number and slogan can turn your company vehicle into a moving billboard. In fact, some companies have their employees spend an hour or two each day just driving around town increasing awareness about the company. If you own the property or have an arrangement with the owner, you can also park it on the side of a busy road for a free static billboard! Get creative and let your vehicles pay for themselves.
3. Luxury Vehicles May Improve Your Company's Image
Using a luxury vehicle to drive to client meetings or to pick investors up from the airport can improve their perception of your company. It may also improve their perception of you. Instead of seeing you as a small business owner, they see you as someone who has already shown tangible signs of success. A company vehicle could be an investment in your company’s image.
4. Don't Forget about Liability Insurance
You will need a business auto insurance policy on your vehicle. These policies are separate from personal insurance policies and are better suited to your needs as a company. Remember, you are liable in the event that an employee gets into an accident while driving a company vehicle through the course of his or her employment, so visit an agency like Great Northern Insurance Agency soon after purchasing your company vehicle (or even before, if you have concerns).
5. Make Sure to Keep Good Records
You may be allowed to take mileage or other deductions for use of your company vehicle. However, you are not allowed to take deductions if you use the company vehicle for personal reasons. Therefore, it is critical that you keep good records to reduce the odds of and for use in disputing an audit.
When used effectively, a company car can increase leads, sales and revenue. This is thanks to your newfound ability to market wherever you go as well as its potential ability to provide a perk to employees who help improve the bottom line. Keep these things in mind, and you’ll be able to make the best of this worthwhile purpose.
I hope you enjoyed this article on things to keep in mind when considering company vehicles. Drive safely!
Interested in more small business advice articles?
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Best Of Luck In Business To You All!
Michael J. Schiemer of Schiemer Consulting
Enthusiastic Entrepreneur & Owner of Frugal Business
Digital Marketing, Social Media, & Entrepreneurship on a Budget
Bootstrap Business: Money - Marketing - Motivation
Mike Schiemer Builds Better Business
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