The commercial vehicles market seems to be weakening among businesses in the United States. In 2021 there were just over 7 million commercial vehicles bought throughout the country, which is a stark decrease from 2020 when there were around 11 commercial vehicles sold to companies. This decrease could be attributed to the dire circumstances of the past two years and the effect the pandemic had on the overall global economy. Many businesses probably didn’t have much use for a fleet of company vehicles in 2021. As the world returns to normality, however, the commercial vehicle market should stabilize again as many businesses start to re-open. Owning a fleet vehicle is better for a company than using a personal vehicle for work, as car-related expenses are easier to track, and the investment will repay itself over time as the business continues to grow.
Should Small Businesses Buy or Rent their First Commercial Vehicle?
Normally, the reasoning behind obtaining a fleet vehicle for a small company is business expansion. For a company with an established brand and a strong flow of income the reason might be to replace already old and used fleet vehicles. Small businesses should be conservative with their money, especially in their infancy stages, and so renting a company car might be a smart move. One of the biggest advantages of renting a company vehicle is that the business will not have to worry about the depreciation of the asset.
Buying vs Renting Concerns
When buying a company vehicle the buyer must always be aware of things like the transmission in the car and the quality and durability of such parts. The transmission of a vehicle is essentially a car’s gearbox, which moves power from the engine to the wheels. When renting, a company does not need to check up on things like that, because they will not actually end up owning the car. Renting might be the smartest move for a small business when it comes to commercial vehicles.
Buying a Company Vehicle: New or Used?
If the company however decides against renting and instead wants to buy a fleet vehicle outright, then the benefits of buying a used vehicle should be considered. It’s nice to always get something brand new, especially an asset such as a car. But the idea of buying a used car should not be quickly disregarded.
Used Car Benefits
The benefits of buying a used car stretch far beyond simple cost-saving on purchase. Besides a lower purchase price, the company will also be hit softer by depreciation on a used vehicle. The company will not have to go through the hassle of registration and will not need to pay any of those related fees.
Lastly, depending on the make, model, and durability of the vehicle bought, insurance rates may be drastically lowered. Of course, the obvious disadvantages of buying a used car relate to durability, the image of the company, and maintenance costs. The pros and cons should be considered and balanced, especially if the business you run is still on the smaller side.