When it comes to purchasing major assets like a motor vehicle for business, you must consider your options, finances and how this purchase will eventually contribute to your bottom line. Decisions like these should always be based on numbers not impulse. There are benefits to new and/or used cars so it all comes down to what works best for your small business.
New cars are expensive but the most reliable option. They come with newer features and depreciate upto 20% once you buy one.
Used cars cost less initially, have cheaper insurance premiums but are not the most reliable. Not to mention, these cars have the lowest residual value i.e they are more prone to depreciation or have a shorter lifespan.
Certified used are dealer-refurbished cars that offer you the best of both worlds. They are almost as reliable as buying brand new with high residual value but don’t cost as much.
Ultimately, the deciding factor should be the type of vehicle you need, how long you intend to keep it and most importantly, its primary use as an asset. For instance, if you are a real estate agent and you need a car to travel to properties and transport documents, a small, used or certified used car that won’t gather much wear and tear would probably be the best option for you. Or if you are a tradesperson and need a vehicle to transport large, heavy items, you would need a van or ute with higher residual value. Eliminating extra features like built-in GPS or a high-end stereo system based on your business needs will help you lower your costs too, especially when buying brand new or certified used.