When your company has a fleet of vehicles, which are getting to the age where they need replacing, you have a few options to consider. It is not a decision you will want to rush into making, and you must do your homework to select the best one for your business. However, making the correct choice can help save your business money and make it more liquid while ensuring you have a fleet of shiny new vehicles that are an excellent advertisement for your business. Below are some of the options you must consider when looking to update your fleet of vehicles to help you consider all options and make the best decision for your company.
Buy Your Fleet Of Company Vehicles Outright
When your business is liquid and has the funds available, you can consider purchasing your fleet of vehicles outright and paying for them in full. You may find that you can negotiate a discount on the specification of the vehicle you want when buying them in bulk, but there are drawbacks to your business doing this as it can be expensive. You must factor in the depreciation of the vehicles, the running and maintenance costs, and the repair costs. When you include insurance costs and the projected lifespan of the vehicle before it needs replacing, owning a fleet of vehicles can be expensive.
However, you can consider getting the vehicles on finance if you still want to purchase them outright, which may help you get a better deal. The vehicle dealers will make more money on the deal when you buy using finance, which means they can offer you a bigger discount as there is more margin, but the same drawbacks still apply. Another similar option is getting a loan to purchase the vehicles, which may be suitable depending on the interest rates you can get on a company loan.
Consider Leasing Your Fleet Of Vehicles
Another option you can consider, often the most cost-effective for businesses, is leasing your fleet of vehicles from a reputable leasing company. You can get a VW transporter lease from Swiss Vans, which can include servicing and maintenance and means you do not have to worry about the vehicle’s depreciation. You can continue with your vehicles at the end of the contract, sometimes at a reduced rate, or start a new contract and update your fleet once again, so your business vehicles always look smart and modern.
A Hire Purchase Agreement
Another option that may suit your business and its finances is a hire purchase agreement, similar to hiring the vehicle, but at the end of the contract, there is a lump sum to pay, and you will own it outright. It is a suitable option for some companies, especially when cash flow is tight, but you need to remember the balloon payment at the end of the contract, which can sometimes take people off guard.
These are a few options available when you need to update your fleet of vehicles. Take your time and speak with your accountant, who can point you in the best direct for your business and its financial situation.
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