I can honestly admit that when we bought our business a couple of years ago, I never once considered getting a company car… Now that I’ve read the guest post below, I’m beginning to reconsider.
You see, aside from the convenience and increased capabilities a company car could provide your business, it takes miles off your personal vehicles and keeps your employees covered and free from using their own vehicles as well. Which can keep more money in your pocket.
So, Is a Company Car Right For Your Business?
Let’s find out below…
Would your business benefit from going mobile? Having a company car is a great way to both expand your services and get your brand out there. Plus, employees get excited to drive company cars, and executives love having happy employees. It seems like there are no drawbacks to buying a car for the company.
Well, like any financial decision, there’s going to be pros and cons. But we’re willing to bet that at the end of the day you’ll pull the trigger on buying a company car.
Pro: Increased Brand Awareness
There’s no shame in sticker slapping your company car to promote your brand. Do it tastefully or cover the body head to toe. Either way, by putting your brand on the vehicle and sending it around town, more eyes are going to be directed toward your business. It’s free advertising!
One thing to remember is that with the good comes the bad. If an employee does something illegal or reckless on the road, this will negatively reflect on the brand and could be bad for business. Set strict guidelines for any employees responsible for driving. Or try out one of the many safe driving apps that reinforce good driving habits.
Con: Costly Upfront Investment
Whether you’re funding a fleet of vehicles or you’re a small company picking out a single car, the upfront investment will be expensive. And it’s not just the lot price. Tires, maintenance, repairs, gas, and other routine car expenses should be accounted for as well.
If you’re a smaller company unable to put forth that kind of investment, consider leasing a company car to start. As time goes on and your company grows, the chance to buy will come again. It’ll be another milestone.
Pro: Easier Commute Makes for Happier Employees
If you’ve ever been stuck in traffic, beneath the blistering hot sun, with no air conditioning, then you know how much easier commutes can be with a quality car. This is especially true for cities like Chicago where the morning and evening rush will leave you stranded in a humid hotbox or a punishing freezer for hours. Best yet, allowing your employees to pick out a company car is a surprise they’ll adore.
To get them excited, encourage your employees to research dealerships in their areas. Often, you’ll find significantly better deals away from major hubs. For the company based in Chicago, it might be cheaper to find an Audi out in Arlington Heights or a certified pre-owned Mercedes in Naperville.
Con: Loss of Alternative Investment Opportunity
By dumping cash into company-owned vehicles, you’ll inevitably lose out on other investment opportunities. This is, of course, the way money works. But if providing relief for your employees is your priority motivation, consider one of the many company-sponsored alternatives:
- Company leased vehicle – With a cheaper upfront cost, leasing can be a short-term and cost-effective alternative to buying.
- Monthly Allowance – A monthly allowance helps employees put money toward financing their own vehicles, although this plan doesn’t take into account employees who have to commute further than others.
- Pay per mile – Your employees will feel valued, appreciated, and respected if you roll out this alternative. Paying per mile helps relieve the stress of rising gas costs, and it’s easily administered. This one speaks directly to the commuter who pays a hefty sum out of pocket just to get to and from work.
Pro: A Company Car is a Sign of Respect
It’s no question that employees will always say yes to the opportunity of having a company car. Not only will they get to drive a high-quality vehicle, but receiving a car from their place of work is a sign of growth and loyalty. It signifies that the company appreciates the work they’re doing and wants to reward that.
Con: Increased Risk
Unfortunately, mishaps happen. This could be a gentle scrape along a metal pole, a runaway hubcap after edging a curb, or in the worst-case scenario, a car accident. With this type of incident comes costly repairs and, in some cases, legal fees. When you lend out a car to an employee, you are considered liable for their safety and any car damages that occur.
Be sure to cover your assets and get as much insurance coverage as you can reasonably afford. This will mitigate any horrific ramifications of, in the worst-case scenario, a bad accident.
Which Car to Choose
Whether you find shopping for a new car a pro or a con, it’s an inevitability. When searching for the perfect car, be sure to find one that represents the values of the company. Include any extra features that will benefit your employees and, if appropriate, bring them into the decision-making process!