New vs. used cars – what type of car should you purchase for your business?

New vs used cars 1

A vehicle is a necessity for a business, and if you are the one who has to purchase the cars for your company, then you may be overwhelmed, because it is a difficult task.

Buying cars for a business is a major investment and you have to ground this decision on numbers and not on your preferences. But this does not mean that you cannot make a smart choice.

You will soon find out that there are numerous possibilities, there are new and used cars, and both of them have drawbacks and advantages.

Important considerations when purchasing a vehicle for your business

Why do you need cars for running your business?

The first question you should ask yourself is why do you need a fleet of cars? In case there is need to buy more than one, then it means that you may have to get a loan first. As they are long-term assets you have to make sure that you choose vehicles that suit your needs and meet your requirements. Some companies buy cars to save on courier taxes, because they carry documents or small items. In this case it is advisable to invest in a used compact car. But if you need to transport large equipment, then it is recommended to try a van. In order to save money it is advisable to eliminate characteristics the driver will not need.

Do you want to lease your cars?

When it comes to making a large investment, you may not have enough saved funds, and in this case it is advisable to check the leasing options. Leasing is a great opportunity if you think that you need new cars.

Check the taxes that come with owning a car

It does not matter if you buy used or new cars, you will have to pay taxes for using them. Every car will feature excise taxes, and it is advisable to check the amount you will have to pay for every one of the cars, because different models have different taxes. If you want to cut down some taxes, then you should consider buying electric powered cars. When a business uses cars it also has to keep records of their usage. It is important to understand the implications of owning cars, when you run a business, because it can be different from owning a personal car.

Should you buy new or used vehicles?

When you decide upon the cars you will buy for your business there are some factors that will help you choose. You will have to consider their prices, their reliability and their features. Also, you should not forget about the running costs, because you have to know for sure that you afford to own the vehicles.

Purchase cost

If we are talking about coststhen used cars are the lucky winners, because they are cheaper than used ones.  There are cases when used cars are sold at half of their initial price, so it is a good deal for everyone who is on a tight budget when they are about to make this purchase. You can get a great car that is a couple of years old and with less money than when you would buy it new. When it comes to used cars you can pay them by getting a loan, and in this way you will not even notice the purchase in terms of funds, because you will not have to make financial efforts.

The majority of people buy new cars because it costs them less to own them. The main advantage when buying a new car is that you know for sure that for a couple of years you will not have to repair it. The maintenance costs will also be lower than if you would buy a used one.

But if it would be to take into consideration the depreciation of the car with 10% of its value every year, then the costs for repairs would not seem so expensive. And there are brands that manufacture reliable cars that do not need repairs for multiple years, even if they are highly used.

For example Ford used cars are a great investment for a company, because they are sold at affordable prices, and they do not need expensive repairs.

The insurance fees

The purchasing cost is not the only one you will have when you will own a fleet of cars. It will cost you money for the entire period you will own and use it. You will have to pay for gas, repairs and the most important for insurance. Studies show that around 15% of the costs of having a car go to the insurance company. You will pay a more expensive insurance fee if you will buy a new car, because it is more expensive to replace it in case it will be damaged or stolen. Here are some of the factors that influence the insurance fee.

  • The cost of the parts is one of the most important factors that have to be considered when insurance is calculated. This is one of the reasons it is not advisable to buy rare vehicles, like vintage ones because there is quite difficult to find parts to repair them, and this means that they are also expensive. Buying a common car as an Opel, Ford or Mercedes will help you keep the insurance fee at a minimum.
  • The theft rates are also checked when estimating the cost of an insurance, because even if people may have the tendency to state that an appealing car is a sure target for thievesit is not exactly like this. They prefer to steal common cars, because they can sell the parts easier. Studies show that Honda Civics and Accords are some of the most targeted cars by thieves.
  • The insurer will offer you a better deal if the cars you buy feature traction control, anti-lock brakes and airbags. This means that the cars are safer and there are greater chances for the passengers not to suffer injuries.