2013-12-10 00:00:00GeneralEnglishhttps://quickbooks.intuit.com/in/resources/in_qrc/uploads/2017/05/Company-Car.jpghttps://quickbooks.intuit.com/in/resources/uncategorized/do-you-need-a-company-vehicle/Do you need a Company Vehicle?

Do you need a Company Vehicle?

3 min read

A company car is one owned by your company and is used for company business. The vehicle could be used for a range of activities from carrying goods to and from places, for deliveries, as a marketing tool or to take a business owner or employee to meet clients or vendors. Depending on the purpose, the choice of what vehicle to purchase would vary: • For hauling and moving items– Vans and SUVs (Sports Utility Vehicles) with foldable seats are ideal • As a Marketing Tool: Cars can be a great way of letting people knows about your business. With a paint job that conveys your logo, service and contact number, a car can be used almost like a moving advertisement. For this a small car –perhaps with an unusual shape that draw attention is the right pick • For client meetings: Utilizing a car as road transport is a great way to save on expensive air tickets if your destination is close enough. Additionally when compared to Air Travel, this option also gives you a means of transport at any location, saving on expensive cab fares or the need to rent a car. For this purpose a car that is comfortable, reliable and economical but also creates a good impression of a thriving business is the right way to go. In the end, the choice must not only align with your needs but also cause you the least amount of financial stress. It is advised that you treat your decision to acquire a company vehicle the same way you would in purchasing any other infrastructure, technology or appliance that would augment your business. Here are three factors to focus on while making your choice: • What is the vehicle’s resale value? While considering a vehicle for the office, the possible resale value of the vehicle should be key in making your decision. While the vehicle should meet your needs, your business should acquire a vehicle that will do well on resale- one with good boot room, excellent mileage and minimum upkeep • Can the car’s fuel system be converted to LPG? As fuel prices – both petrol and diesel continue to rise, a wise business owner should consider the option of running their vehicle on Liquefied Petroleum Gas to keep costs down. Since this may allow you to fuel up in only a select number of fuel stations, it would be a good option to adapt your car so that it can run on petrol/ diesel and LPG • Can you currently afford to invest in a Vehicle? As with all your decisions, you need to weigh utility against cost and gauge your financial situation and ascertain whether this is the right time to invest. While the car market suffers, manufacturers do offer prospective buyers schemes like massive cash discounts, waivers on processing fees and low interest rates. The trick is to get the best deal in order to get the best value for your investment For a small business, a company owned car also provides Tax benefit as depreciation of the vehicle can be accounted for, but more and more companies are looking to leasing rather than buying a car outright. Some of the advantages to leasing are • Insurance, registration and maintenance are taken care of by the leasing organization • As long as the condition of the car does not deteriorate drastically, you are only liable for the monthly rent • Monthly Rentals are usually lower than EMIs allowing you to reallocate parts of your spending budgets into other areas • With a lease agreement, you can experiment with a range of vehicles based on size and style before settling on what is the correct choice for your business. Leasing also gives you the option of upgrading when you have more funds free for a bigger and better vehicle

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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