A Guide to Choosing a Vehicle for Your Business

Most businesses require at least one vehicle for the smooth running of their operations. They are used for a number of business functions such as transporting workers, goods and equipment.

Buying or leasing a commercial vehicle may also have important tax benefits for your business. A business vehicle is one of the largest costs that many small businesses face, and it is for this reason that this decision should not be taken lightly. The following is a concise guide to choosing and obtaining a business vehicle.

Common types of business vehicles

Van – A van has two main configurations. The first of these configurations is for carrying cargo and in this design entire rear section of the vehicle is one large cargo bay. A cargo van is perfect for transporting stock and equipment as well as making deliveries. The second configuration is designed to carry between 8 to 15 people. These are usually called a minivan or minibus. This type of vehicle is perfect for transporting a large number of workers between sites, to different jobs, to conferences and similar events.

Ute – A ute is a common business vehicle because it is perfect for transporting tools, small machinery and other goods. These vehicles are popular with tradesmen, builders/construction workers and similar industries.

Truck – A truck is generally only required for businesses that have larger transport needs. This includes transporting large and/or large amounts of cargo over any distance. That being said, many businesses that require this type of vehicle simply use a transport company instead of buying/leasing their own truck to cut down on expenses.

Standard car – These vehicles are surprisingly common for businesses and are mostly used for transporting single or small groups of workers. They are mostly used in industries where a worker travels often for their work such as a real estate agent, salesperson, consultant and similar industries. A standard vehicle may also be used to tow a company trailer to business events.

Buy or lease?
There are a number of advantages and disadvantages to either of these options. In recent years buying a business vehicle has become more common because of the many tax advantages that are now offered to small businesses. It is important to be aware that these tax advantages only apply to new vehicles. Leasing still remains a popular option because the vehicle is replaced with a brand-new model after a set period of time and it also has some tax benefits.

Generally speaking, small businesses prefer to buy a vehicle and companies with large fleets of vehicles prefer to lease them. In saying this, a chattel mortgage is a common form of financing. Your qualified business accountant should be able to provide you with a breakdown of what will work best in your situation.

Securing the deal
If you decide to buy a business vehicle the first thing you need to do when approaching a dealer is mention that your vehicle will be used for business purposes. They will then ask for your ABN and be able to offer you a special deal based on their commercial prices. As with any car purchase you are able to negotiate the price and many dealers will also accept trade-ins. Finance can be arranged through the dealer, but a car loan offered through your business bank of choice will usually end up being more cost effective.

Protecting your purchase
You need to ensure that the vehicle is insured before you drive away from the dealership. Many business insurance policies will cover a business vehicle, but there may be some restrictions you need to be aware of (for more specific information about business insurance you can visit http://www.accesspl.com.au/). It is important to have comprehensive insurance on any commercial vehicle because it is a business asset.

Buying a business vehicle can seem like a daunting task, but it isn’t all that difficult. All you really need to do is choose the type of vehicle, decide if you’ll buy or lease and then secure the deal. Now is a great time to buy to take advantage of the tax breaks offered to businesses.