There are many things to consider when buying a company car, including fuel efficiency, reliability, and safety. Purchasing a company car should be an investment that will help improve your profit margins rather than become a detriment to your business. There are some mistakes that you should avoid at all costs. Take a look at five common mistakes people make when purchasing a company car.
Not Doing Enough Research Beforehand
It's a bad idea to buy a company car without doing plenty of research beforehand. If you don't know what kind of car is best for your needs and budget, you could end up with something that doesn't suit your company's needs or isn't easy for your employees to handle.
The most important thing to consider when buying a company car is the size. It would be wise to get a list from the dealer about all available options, so you can compare prices before deciding which one will work best for your situation.
In addition, it's worth considering if safety features are essential to save time and money down the line in case there's an accident while driving the vehicle.
Finally, consider the cost of shipping the vehicle after purchasing. For instance, if you reside in Hawaii and are buying your vehicle from another state, it is prudent to consider the cost to ship your car to Hawaii. This way, you will avoid unnecessary surprises along the way.
Not Putting in Writing what You Want on Your Contract
When you're buying a company car, there are inevitable mistakes that you should avoid. One of those is not putting in writing what you want on your contract. The reason for this mistake is that the dealer might try to take advantage of you.
They will offer things they know you don't want as part of the deal, such as extended warranties or rustproofing options. This can end up costing more money than if you had negotiated the extra amenities ahead of time and agreed upon the finer details of the negotiation before signing any contracts.
Negotiating Only on Price
Negotiating only on price is one of the mistakes to avoid when buying a company car. Dealing in this way can lead to long-term problems with your vehicle, which will result in more money spent in the future. For example, if you negotiate on price alone and end up with an expensive lease payment for five years, you may not be able to afford maintenance due to a lack of cash flow later on.
This could mean that you are stuck with a poorly maintained vehicle that is getting less fuel-efficient each year because it needs proper care and service that they neglected during those first few years.
Assuming that a Lease is Better than Buying
It's a myth that leasing is always better than buying, and there are many situations where it might be the wrong choice. For example, if you plan to keep your car for ten years or more, you'll end up paying much more in total by leasing because of all those extra payments.
And if you lease without understanding the terms of the contract, like how much mileage they included with your lease agreement, then it may cost even more money down the road. For instance, you have to buy new tires due to excessive wear and tear due to driving too many miles on your leased vehicle. The bottom line: make sure you know what kind of deal leasing will get you before signing any contracts!
Neglecting to Consider Maintenance Costs
Another mistake to avoid when buying a company car is neglecting to consider maintenance costs. The cost of maintaining your vehicle can be challenging to predict. It is very useful, however, to have an accurate sense of how much money you can plan to spend on your investment over time.
This includes performing routine oil changes and other preventative measures for your engine, as well as having the necessary parts replaced before they break down completely.
The best way to estimate these costs is by considering what you know about the specific make and model that are being considered. It includes any known issues with its reliability or history of repairs due to common problems. It may also help if you consult with a mechanic or someone who has experience with owning a similar vehicle.
To avoid the above mistakes, you should negotiate all aspects of the deal with a company car. This includes both price and perks like maintenance, fuel efficiency, and even color options. It's also crucial that you understand what type of vehicle is going to work best for your business needs before negotiating so that there are no surprises when it comes time to sign your company's name on the dotted line.