Considering getting a company vehicle to help your employees travel safely when working during these trying times? This could be a great idea, as not only does it keep your own staff safe and off public transport, but it can help to keep other members of the public safe too. This really is the year to invest in a company vehicle. But, of course, you need to make sure it’s financially viable. Here are some areas to focus on so you can come to the best decision.
Assess the Costs
Of course, before making any business investment, you should consider all costs involved. Here are some that you need to add into your budget to ensure that this is the right move for you and your company.
The Vehicle Itself
The main cost that you will encounter when buying a company vehicle is the cost of the vehicle itself. Few companies will buy a vehicle outright. Instead, they tend to take out finance plans. Don’t feel pressured into choosing one option or another. Make sure to browse different dealerships to find the best deal possible.
Check out insurance policies for the vehicle you’re considering. Different vehicles will cost different sums of money to insure your staff on. You need to make sure that you’re choosing something reasonable that you can afford.
Remember that the vehicle will need some sort of maintenance. Even brand new vehicles can face problems as they are used and build up miles. Whether that’s new tyres, a truck oil change or anything else. You need to ensure you have some sort of savings pot or emergency fund for vehicle maintenance costs.
When you have a company vehicle, you genuinely cover the fuel with some sort of fuel card that your staff can use when they need to fill up the vehicle. Figure out how far the vehicle will travel and how much fuel this will use. This will allow you to figure out the average cost of fuel that the vehicle will require.
Company Car Tax
Company cars are subject to Benefit in Kind (or “BIK”) tax. You need to make sure that you incorporate this into your budget if you do go ahead with this purchase. The amount of tax that will be paid will depend on multiple factors, including:
- The vehicle’s CO2 emissions
- The make and model of the vehicle
- The vehicle’s list price
- What type of fuel the vehicle uses
- How often the vehicle will be used
Company Van Tax
Company van tax differs from company car tax, which is why many companies opt for a van instead of a car. If you provide your employees with a van and it is used solely for work purposes, they won’t be charged a tax. This includes “insignificant private use”, which could be using the van to get coffee or food on the way to work or driving to appointments during the work day.
These are just a few costs to consider when it comes to getting a company vehicle. Hopefully, the above information will help you to work out whether a company vehicle will be cost effective for you and your business!
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