Buying a fleet vehicle for a company is necessary for almost every business owner. However, it is a bit different than buying a regular car. Registering it is different, and so are taxes, insurance, etc. You have to inform yourself well to know how much time and money you need. Here are seven essential things to consider before choosing a fleet vehicle for your business.
Open a bank account and establish your credit file
Depending on the needs of your business, you might need a few different bank accounts. Use one of those for purchasing your fleet vehicle. Also, try to get a basic business credit card and try to strengthen your credit score by making all payments on time and in full. However, keep in mind that it might take two or three years to build your business credit to the point where you can get super favorable terms.
Find the right local car dealer or go to the manufacturer
If you need only one vehicle for your business, the best way is to find a local car or truck dealer and search for the best new or used trucks for sale. On the other hand, if you need several vehicles for multiple business needs, you should go directly to the manufacturer. However, each of these manufacturers has their own rules. Before making the final decision, check them all out and see which option suits your current needs the best.
Use a lease if necessary
The best option is to buy your fleet vehicle with cash. However, when it is not possible, a lease may get you to lower down payment as well as smaller monthly fees than you would get if you were the one who financed the purchase. Before you opt for a lease, there are a few things to consider. The most important one is to carefully consider how many miles a year you plan to drive. Don’t choose a lease if you need the vehicle only for deliveries. If you plan to use it for more than that, then the lease will be a super useful option.
Get insurance and secure documents
If you want to use the vehicle only for the needs of your business, you’ll have to purchase insurance. You will have to show the proof of insurance even before you complete all final paperwork for the purchase. Depending on the country you operate in, you may need higher liability insurance coverage. Besides that, when you sign all relevant documents, include your business name and make sure that all documents indicate to that name and not your personal.
You’ll need to provide proofs of identity and legal existence
When it comes to registering the vehicle, you’ll have to prove that your business owns it. Documents such as a bill of sale, title or finance agreement are all essential. Depending on your country/state, a driver’s license might be required for all business owners. Also, you’ll have to provide proof of insurance before the registration of your fleet vehicle. Afterwards, you will have to secure photo ID for all individuals and all vital proofs of the legal existence of your business – a copy of your business license, a partnership agreement, etc.
Complete the inspections
Safety inspections are necessary for all newly registered vehicles. Don’t hesitate with finishing all your obligations with inspections immediately. Even call in advance to know how much money you need to spend on that. Use your business bank account and keep all your receipts.
Pay all vehicle expenses with your business bank account
You should use your business bank account and credit card to pay all vehicle expenses. By doing that, you will keep your business and personal costs separate. Also, explain to your employees that they should also use those funds for buying fuel and other business-related expenses. Again, keep all receipts, including fuel, maintenance costs, taxes, etc. The biggest reason behind this is that these expenses are tax-deductible.
Keep in mind that all the things you have to consider before the purchase require a lot of effort and planning. You have to know your budget, limits and needs, of course. A vehicle for your business is vital, but don’t purchase one without careful analysis of each of these factors.
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