There’s a wide range of contexts in which a set of wheels can be invaluable for business, ranging from courier firms with their dependence on cars and vans to deliver goods to purchasers quickly, right through to luxury vehicles, such as limos, that are used as opulent passenger transport.
But if a car plays an integral role in your own business, the effects of the COVID-19 crisis may have left you contemplating what a major cost it represents, while asking yourself what you could do to reduce that. Well, here are some suggestions.
Consider whether your car still meets your needs
Sure, if you’re in financially straitened circumstances as it is, the thought of having to invest in a new vehicle to replace one that no longer fulfils your requirements might be a little wearying.
However, the coronavirus pandemic has really upended many of our working lives, and it’s perfectly possible that certain qualities of your existing business vehicles – such as comfort, passenger capacity or cargo space – may have increased or declined in importance for your firm.
Take advantage of any available tax relief
Tax can be, well, taxing even for those of us who think we’re ‘good with numbers’. It’s therefore well worth looking again at what tax breaks may be available for the cars your company uses.
As the Talk Business website explains, you might be able to get a tax reduction if you only use your business vehicle part-time, the car has been adapted to aid mobility, it is only used for business rather than personal purposes, and/or it has low CO2 emissions.
Switch from general to more specialised insurance
Cars used for business purposes can naturally vary hugely across the various sectors in which they are needed, and it may be the case that the insurance you presently have for your business vehicle isn’t a brilliant match to the level or nature of the protection you require.
Standard private hire insurance, for instance, is not the same as limo insurance, which is designed specifically with limousines in mind. Not only private hire cover, but also passenger liability and the higher cost of repairing and replacing such a vehicle, are accounted for in a limo insurance policy.
As for how you can reduce the cost of your business’s limo insurance, the experts in specialist cover at MoneyBeach suggest that a cleaning driving licence and positive claims history will help. But to minimise your premiums still further, you might also consider the benefits of a limited mileage policy if this suits how often you use the vehicle, or a classic car policy if the limousine is a classic.
Lease your business vehicles instead of buying them
It may seem more ‘prestigious’ in some ways, or even just safer, for your business to own its vehicles outright. Just think, though, about the adverse effects of depreciation. Do you really want your business car to depreciate at such a rate that you can’t sell it for the money that would enable your firm to purchase a suitable replacement at some point down the line?
This is just one reason why leasing your business’s vehicles might make more sense than buying – with the smallbusiness.co.uk website explaining that another is the opportunity it gives you to upgrade your car to the latest model every three or four years.
What’s more, your monthly lease payments might not be as high as the payments on a loan for the same model of car would have been. Leasing may therefore allow you to access a higher-quality vehicle than would have otherwise been possible.
While your business car may be a very significant expense, there’s still plenty of scope to shave pennies and pounds off your related costs each month. Follow the above tips, and you might be surprised by how much money you are able to put aside for your business that could prove crucial in the uncertain times ahead.