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Published on January 5th, 2014 | by richard

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Company Cars: Why It Pays To Choose The Right Purchasing Options For Your Business

In the United Kingdom, many businesses need to have a fleet of vehicles for its employees. For example, some cars may be required for senior managers or directors; motorway stormers might be needed by sales reps, and tradesmen working onsite will need to have a spacious and reliable panel van for transporting various tools and materials in on a daily basis.

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Generally, businesses don’t expect their employees to use their own vehicles, so they will need to maintain a fleet of cars and vans which are the disposal of the company’s employees. If you are new to fleet management, how do you know which is the best option for your firm?

Here is a handy guide that covers the various purchasing options available to you so that you can make an informed decision before spending your company’s money on some cars!

Buying cars outright

The first option available to fleet managers is to simply buy the cars they require outright. If this option is chosen, the company will fully own the cars outright and not have to pay for any financing costs. In fact, the only things a company would have to pay for are car tax, MOT, insurance, servicing and general maintenance costs.

If your company has a stockpile of money then it is worth investing the money in a fleet of cars, as during tougher economic times you can always sell off the cars when you need to raise some capital.

The only downsides to buying cars outright are depreciation (some cars plummet in value whereas others tend to attain high values for as long as possible), and potentially having to outlay huge sums of money for several new cars.

Of course, like with individual consumers, businesses have the option to buy used cars rather than brand new ones, but buying used cars can sometimes open up a can of worms; engine problems and hidden pasts not disclosed by a car’s former owners are just two of many examples.

Leasing

A more flexible and favourable alternative to buying cars outright for your company’s fleet is to lease them! There are many benefits to leasing cars over buying them outright, the main ones are as follows:

  • Smaller upfront capital investment – if you buy a car outright, you obviously have to stump up the entire price for the car before you can drive it away, whereas if you lease a car you simply pay a deposit equivalent to a few months’ instalments, and you spread the rest of any balance out over a period of time to suit your requirements;

  • Add-on products make fleet management easier – if you wanted to lease a Volkswagen Golf for your business, for example, many leasing companies such as Listers include add-on products within the price of the lease that can make your life easy, such as road tax, breakdown cover, warranty, and even delivery to your firm’s premises;

  • Payments are affordable – the main selling point for car leasing is that all payment plans are flexible and designed specifically around your requirements, rather than a one-size-fits-all arrangement!

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