Buying a service vehicle for your business almost always requires a considerable upfront cost. However, it is often necessary to scale, expand your area of services, and increase overall sales. But like many other business owners, you likely have a limited budget to spend on a new business vehicle.
That said, how do you invest in a good business vehicle without ending up in a tight financial spot? Before scoping out potential cars to buy, here are several essential tips that you should keep in mind:
- Choose the right-sized vehicle
One of the first factors that you have to consider when choosing a vehicle for your business is the size-and more often than not, the size matters more than the price. Buying a too-small car because it is cheaper is counterintuitive to saving money on a business vehicle. If you end up having to make multiple means of transport, you’re spending more money on gas than if you just bought a bigger one.
With that in mind, determine the average load of each delivery that you have to make regularly, and from there, identify the size of the vehicle you need. Doing this can also help narrow down your choices. For example, if you will be delivering large-sized loads, you can go directly to aVolvo semi-truck dealershipinstead of waste your time looking through inappropriately sized stock.
Wait for the right time
No matter how great the need is for your own business vehicle, buying one when your business is not ready for that kind of expense is likely a wrong move. Assess your cash flow before making such a large purchase, and if you are confident that you can handle the vehicle payments, maintenance, gas, and other expenses, then that’s the only time you should push through with the purchase.
Otherwise, put your plans on hold until your business gets to a more stable financial position. If you push through with buying a business vehicle when things are wobbly, there is a good chance of encountering financial problems in the future, most notably-negative cash flow.
Consider renting or leasing
Renting or leasing a vehicle has its pros and cons. When you rent a car, you may pay more than what you would pay if you buy your own vehicle, but you will not be responsible for maintenance, insurance, and taxes. The same goes for leasing one, but with leasing, there is a possibility that you can buy the vehicle from the owner at the end of the lease period. And in both cases, you won’t have to worry about vehicle deprecation, unlike when you buy a brand new business vehicle.
If your business cannot afford its own service vehicle just yet, renting or leasing are two great options to consider.
Buy a used business vehicle
Whether for personal or business purposes, buying a used vehicle is always cheaper than buying brand new, making it an excellent option for companies with limited budgets. Of course, there are specific pros and cons when purchasing a used vehicle that you have to consider carefully.
- Little to no depreciation, depending on the age of the vehicle
- Lower upfront costs vs. brand new
- Insurance rates tend to be lower
- The vehicle may already be customized according to your business needs
- Wear and tear, hidden problems
- Higher maintenance costs
- Outdated technology, depending on the age of the vehicle
Pro tip: buy a business vehicle from another business, preferably one with an owner that you know personally and trust. If their business is similar, that’s much better since their cars will probably be outfitted with the customization you need. If you don’t know other companies you can buy from, choose your dealer carefully-go for the most reputable ones to secure your investment.
Buy at the right time
Unless your business needs its own service vehicle right now, it is highly advisable to wait for the most opportune times to buy a business vehicle. For example, most dealers will be more willing to offer substantial discounts near the end of the quarter when trying to get rid of inventory. Moreover, you could also try waiting for special holidays or events to maximize potential discounts on your purchase.
A service vehicle is an excellent investment for any business-that is, if you buy wisely. If you have a limited budget to work with, applying these tips to your purchasing decisions can help you make the best investment-as well as save a substantial amount of money along the way.