Company cars. We’re all roughly familiar with them, but if you’re a business owner looking to get one (or more) for your organisation for the first time, picking can seem like a rather daunting task.
What makes a good company car, then? The answer to that question today is a lot different to what it may have been 20 or even 10 years ago. This article will look at everything you need to consider when picking the right car for your business in 2021.
What is a company car?
A company car is a car given to an employee by a company or organisation for them to use as their own private transport, alongside business use, for as long as they’re with the business. Typically, company cars are bought in bulk by a business, often with the employees eligible choosing a model from a restricted list.
Naturally, when you’re buying cars for business use, there are a few things they need to deliver on in 2021:
- Value for money
- Fuel economy
- Professional image
- To some degree, luxury
Company cars of years gone by perhaps favoured the idea of luxury and image over all else, but in a world where green initiatives and consumer sustainability are becoming a major focus, gas-guzzling exec saloons are becoming a little thinner on the ground. Of course, a company car should reflect your business image properly, but with may organisations taking a green turn in recent years, that has significantly changed the mould of your average company car.
The questions you need to ask yourself
So, you’re trying to whittle down what makes a good company car for your business. There are plenty of questions you need to ask yourself:
- New or used? Company cars don’t have to be straight off the factory assembly line. In fact, there are many types of used cars that make for great company cars and represent much better value in the process. For many small to medium businesses, used cars represent a budget friendly but highly serviceable option, and you should consider whether your employees really need brand-new plate models.
- Petrol, diesel or electric? Diesel is still largely king in the company car world as it’s the most efficient fuel type for longer journeys. Petrol is better suited for stop start, shorter journeys if you just need cars for the local area. The government my have upped Benefit in Kind surcharges on diesel from 3% to 4%, but the cost benefits for longer journeys still largely outstrip those tax increases. If you are looking to go truly green, the electric vehicle is the natural choice for the future, but you’re going to need a hefty budget to afford an EV fleet right now.
- Finance or buy outright? Finance options break down your fleet costs into more manageable monthly instalments that line up with monthly revenue (helping keep monthly costs to a minimum), while buying outright will save you money on the total cost of your fleet (thanks to no loan interest) but demands a significant sum of money up front. Yes, it is cheaper to buy in one go, but paying a large lump sum in a single month can be a threat to your cash flow, so make sure you can afford to do it.
The three questions above are the heavy hitters that will define the company car mould for your business. The choice you make will unsurprisingly largely come down to your budget, but don’t ignore factors of sustainability going forward. If you can establish a green image in your company car fleet now, you’ll be doing yourself a favour later, both for the environment and your brand image.