5 things you need to know about your business vehicle

A business vehicle is becoming a necessity for most businesses. It allows for a mobile workforce, enabling employees to better conduct business and serve customers.

Business vehicles also offer the opportunity to increase clientele and service areas since they can be used for making house calls, transporting employees, performing long-distance business needs, delivering products, advertising company products, and so on. Acquiring a business vehicle entails a lot of things that you should know about beforehand. For instance:

Buy or lease?

While it’s possible to use your personal vehicle for business purposes, it exposes both you and your business to liability charges in case of an accident. That’s why you need to buy or lease a vehicle specifically for business. Leasing allows you to obtain more costly vehicles at slightly lower monthly payments. This is an attractive option for small business owners with minimal cash flow. On the flip side, it comes with mileage limitations. Buying, on the hand, is a better option if you’re going to need the vehicle for over five years. It may be costly, but you get to own the vehicle at the end of your car loan payments.

Selecting new vehicles

Once financing is sorted, it’s time to determine the type of vehicle that would best meet your company needs. Whether you go for a truck, van, or a small car will depend on what you want the vehicle to do. Cost is another top consideration when selecting a vehicle. You definitely want to choose one within your budget. In addition, consider the resale value of the vehicle in case you need to sell it later on or trade it in for a newer model.

Get your commercial auto insurance right

Your business vehicles should be insured appropriately. While standard auto insurance policies seem less costly, they don’t always carry the level of protection your business vehicle may require. If you’re leasing, you may need to purchase GAP insurance on top of the comprehensive coverage for the leased vehicle. With so many insurance providers out there, it’s important to compare van insurance online to ensure you are getting the best deal possible.

Budgeting for fuel costs

Fuel is the major running expense for any vehicle. With fuel prices being extremely volatile, consider using online mpg calculators to determine a vehicle’s fuel economy, especially if you’ll be doing lots of trips. After adding a vehicle to your workforce, employees should implement fuel-efficient driving techniques to lower fuel consumption, which will save your company a fortune and minimise your environmental impact on the road.

Accounting for employee use

Consider limiting the use of a business vehicle to business use only. Employees should maintain a daily travel log, which lists all destinations, mileage driven, and the reason for each trip. This will help reduce unnecessary vehicle expenses often incurred from non-business use or outright wastage. If you permit your employees to drive company vehicles home, it may be impossible to completely prohibit personal use. In that case, ensure they conform to the insurance coverage.