So you’ve just started a new company, and your revenue is healthy. Congratulations! At this point, you are thinking of getting yourself a new set of wheels. That old banger parked on your drive isn’t good enough to use when visiting new and existing clients.
One of the keys to making money in life is to leave a good and lasting first impression. When you visit a potential client, the first thing they will notice is what car you drive. Followed by your dress sense and ability to articulate your words!
Now I can’t help you with the latter two things. There are plenty of other sites that can though! But what I can assist you with is the former. Business cars aren’t just vehicles that get you from A to B. They are cars that help you to convey a particular image.
It’s important that you choose the right car for your needs. Go too sporty, and people will think you just blow your company’s money. They would also think your business might not be one they want to invest their money in!
Go too formal, and your clients might assume you’ve got a lack of creativity or thirst for success. They want to do business with a leader, not a follower! But don’t worry. Today’s blog post will see to it that you consider your options and choose the right company car. So, are you ready? Good. Let’s get cracking!
What are your motoring needs?
One question you need to ask yourself is what you want out of a company car. OK, so we’ve talked about how important it is to convey the right image to your customers. Aside from that, what are your particular needs?
If you’re likely to carry a lot of product samples and retail stands, an estate or large saloon would be more suitable than a hatchback. And if you use your car as a mobile office, you’ll need one that offers the right tech features such as handsfree calling.
As a business owner, you’ll often spend your time seeing many different clients and suppliers. You’ll also have to entertain those people on some occasions. If they need to get a lift with you to places, you might also want to ensure your car is comfortable and luxurious.
The last thing you want to do is drive around in a clapped out Ford Fiesta with only enough room in the back for a loaf of bread!
Is leasing better than buying?
For business customers, yes. The great thing about leasing is that you can hand your car back after three or four years and get a new one. When you buy a car, you’ll make a big dent in your company’s cash flow.
You’re also “stuck” with the car. When you decide to sell it, you’ll find it can take a while to get rid of it. And you know what the terrible news is? Depreciation will have eaten a huge chunk out of your car’s value!
When you lease a car through Listers contract hire, for example, you don’t have to worry about depreciation. That’s because you are, in effect, hiring a car instead of buying it. The only entity that bears the cost of depreciation is the one leasing you the car.
When you organise a lease, you can include things like tax, servicing and maintenance as part of the deal too.
How can you reduce your tax liability?
The bad thing about company cars is that you have to pay three forms of tax on them! As you can imagine, high taxes on gas guzzlers aren’t going to make company cars an attractive idea. So, how can you lower your tax liability and still drive around in a nice, luxurious vehicle?
There are a few ways. First, let’s talk about VAT. Your business can usually claim 50% back on the VAT you pay on your lease car. If you use your vehicle just for business use and can prove you have a personal car already, your company can claim 100% of the VAT back.
Next there’s road tax. In many countries, the road tax you pay depends on the type of car you drive.
If you drive an electric vehicle or one with ultra-low emissions, you might find that you pay no tax! But if you’re sporting a gas-guzzling Range Rover V8, for example, you’ll need to sit down once you learn how much tax you’ve got to pay!
Company cars usually opt for vehicles with diesel engines. That’s because they tend to offer lower emissions than their petroleum-based counterparts. Many of today’s car makers build vehicles using efficient engines. You now have more choice over the engines you can opt for as they get built to meet Euro 6 emissions mandates.
As a company car driver, you also get taxed through your personal income tax! Some governments consider company cars as a “benefit in kind.” The BIK tax you pay depends on how efficient your car is. Hence why diesels and electric vehicles are the cars of choice for business people.
Are there any cars that are good on fuel?
Yes. As mentioned a moment ago, diesels are efficient vehicles. They get chosen by company car drivers because of their fuel economy and low CO2 emissions statistics. Many of today’s modern diesels make use of evolved turbo technology.
In essence, the more air that gets pushed into an engine’s intake system, the more efficient it becomes. BMW cars, for example, tend to have “TwinPower” engines. They are units with twin-scroll turbochargers. In layman’s terms, they mimic the effects of using two turbochargers.
What that means for motorists is increased performance and lower fuel consumption. So you get more mileage out of a tank of fuel. And, as a result, your CO2 emissions are lower as well.
When shopping around for a new company car, be sure to check for the following:
- Low CO2 emissions;
- Low taxes;
- High engine performance; and
- Attractive lease deals.