Most small business owners have to travel for work. But few know about the benefits of a corporate fleet vehicle.
Read on to discover the ins and outs of corporate fleet vehicles. Then you can decide whether your business needs one.
What is a fleet vehicle?
A fleet vehicle is a car owned or leased by a business. By definition, an individual does not own it. In some cases, employees use the vehicle for business purposes. Ultimately, the company handles maintenance and repairs. Plus, it also pays for insurance and manages relevant taxes.
In general, any small business can use a fleet vehicle. Industries that commonly use fleet vehicles include the following:
- Catering
- Delivery
- Transportation
- Home services
What are the challenges of fleet vehicle maintenance?
Before buying a fleet vehicle, consider the maintenance challenges.
Your fleet vehicle will be on the road often. You may have to pay for frequent tune-ups or repairs. Additionally, maintenance has limitations. Even if you take good care of the car, it will lose value.
There are other problems to consider, such as checking employee records before they drive. Using available tools, you can track employees’ mileage and locations with a car tracker and monitor car health with an OBD2 scanner. But there’s always the chance of an accident. Moreover, accidents increase maintenance expenses and insurance costs.
Should you consider buying a fleet vehicle for your small business?
A fleet vehicle is an investment. Before making a purchase, think about these pros and cons:
Pro: Efficient operations
A well-maintained fleet vehicle can be critical for a business that has to travel for revenue. Your team can rely on it to make deliveries or complete jobs on time.
Pro: Branding opportunity
Any fleet vehicle can be branded. Driving a branded car can increase your business’s visibility. You’ll gain exposure each time it’s out on the road. If locals recognize your brand, they are more likely to trust it.
Pro: Employee perk
Some employees think of a corporate fleet vehicle as a perk. Employees expense mileage when they use personal cars. After they log their drives, they are reimbursed. A fleet vehicle reduces employee legwork. The business tracks mileage and pays for gas. Plus, the employee doesn’t have to worry about the car’s depreciation.
Con: Expensive investment
A fleet vehicle is an investment. Your business must have a solid cash flow to afford it. Consider what you stand to gain before taking the leap. You will take a loss if you sell your fleet vehicle in the future.
Con: More paperwork
Even if you own a single fleet vehicle, your administrative workload will increase. You’ll need to manage maintenance, insurance, and tax filings. You might not have the staff or the personal time to manage this workload. If that’s the case, consider other options.
Con: More liability
Your business will be liable if something happens to an employee while he or she is driving a corporate fleet vehicle. Insurance can protect your business against some legal action.
How can you buy a fleet vehicle for your small business?
Most auto manufacturers will give you a discount if you buy five or more vehicles. A price reduction might also be possible for a smaller purchase. Ask the fleet sales manager about the available allowances. The estimated expense might influence your decision.
Consider the following when choosing your car:
- What you’ll be using the fleet for
- Who will be using the fleet
- How the car feels
Just as you would when purchasing a car for personal use, test drive your top options. A smooth ride might mean less risk of an accident.
