If you own a company, it might be tempting to offer advantages to your employees to attract prospective employees and give them a certain quality of life that allows them to be more efficient at their work. One specific advantage that many people have discussed over the years is the company car offering. The real question though is whether company cars are a solid investment for your business’s future or a waste of funds that will simply cost you a lot of money. To get a better perspective when discussing this issue, it’s important to look at it from all possible angles. So, let’s look at what company cars can do for you and know what issues that could cause long term.
Employee Advantage
When it comes to offering a company car it’s important to realize that it will be a great benefit to your employees or those applying to get a job at your company. In many cases offering a company car allows your employees to go about their day more easily and more cost-effectively. This is why offering a company card to employees means that you are offering something of great value which in turn means that a lot of employees will be ready to work to be able to benefit from this privilege. Mind you a lot of company cars are only used on duty which means that your employees only use them as part of the job which is still a great thing because it means that they are not putting mileage on their cars.
Advertising
As you can imagine when you purchase a company car one of the most important things to do is to label it as such. No matter what type of business you have putting your logo and your business information on your company car is a great way to get free advertising as you or your employees go about their day using the car around town. This is effectively killing two birds with one stone by being able to use a car that belongs to the company and purchasing a traveling billboard for yourself. If you are a company that works locally this is a great way to get a bit of visibility and make sure that your name gets out there.
Gas and Maintenance
One of the big downsides that comes from purchasing a company car of course is that you will have to take care of every issue with us and make your business spend on the maintenance of your vehicle. This not only means that you need to pay for the decals to be put on your car for advertising but also for every little repair that comes up or preventive spending to avoid having to repair the car itself. This is why if you want a company car you should invest in anti-rust treatment. You can get a cover for your car if you don’t have access to underground parking to make sure that it is protected from possible environmental damage whether it be rain snow or hail. All in all, if you have a personal vehicle, you know that taking care of a car can be quite expensive.
Tax Credit or Write-off
One of the great things about having a company car is that of course it will be covered as a business expense. This means that depending on where you live you might be able to get a government credit based on our much mileage you put on the car for work. Not only that but it also means that in many cases your gas, repairs, and general maintenance fees will also be tax deductible as they are done in the interest of your business. This can be extremely beneficial if you use the company car as your car which means that your daily use of the car is part of the business. This allows you to have a vehicle that both advertises your company and saves you money in the long term.
As you can see there are benefits and downsides to owning a company car. The decision should come down to whether purchasing or renting a company car is the right decision for your type of business and if it suits your needs both in a short- and long-term business decision. Whether or not you decide to add a company car into your fleet you should consider the option and look at both the positive and negative of doing so. While in many cases it might not be a useful addition in others it might be a great way to save money in the long term. After all many people say that it is important to spend money to make money at the end of the day what you want to do is make money not spend it if you don’t have to.
