Owning or leasing a vehicle for business use comes with recurring and some hidden costs that in most cases are tax-deductible. These include:
- Fuel and Oil
- Loan repayments or Lease payments
- Servicing and Repairs
- Insurance premiums
- Registration and licensing fees
- Fleet tracking and management Software
- Tolls and Roadside Assistance
Vehicles are said to be a poor investment, and given the above list, its easy to see why. Not to mention, depreciation which is a hidden cost that only increases the older your vehicle gets and the more it’s used. Fortunately, depreciation is a tax-deductible expense.
So how do you lower your vehicle related costs? We may have a few tips to help.
- Fuel costs vary based on your location and fuel station or brand. Smartphone apps like PetrolSpy, MotorMouth, Fuel Map and GasBuddy show you the cheapest fuel available near you. If your business use of a vehicle is more than average, it might be worth checking out the Fuel Card options available to you which can make accounting for fuel easier in the long run.
- Car loan rates vary from lender to lender and are also affected by the age of the car, model and make, your credit history and income. Fortunately there are innumerable car loan rates and vendors out there, so do your research before you choose one. Same applies if you are looking to lease a car for your business.
- Local mechanics can work out to be cheaper than official dealerships when it comes to servicing and maintenance and some even offer the same level of service. Check out google reviews before you zero in on one.
- The Australian car insurance market is highly competitive so make sure you shop around and get quotes from as many providers before you settle in on one. Also, since insurance premiums usually increase every year, around the time of renewal, have a look at what else is available in the market.
- You might be able to save a few bucks if you opt to pay your rego annually instead of semi-annual payments.
- You could slow down the depreciation process by maintaining your vehicle well by getting it serviced regularly, and whenever possible, park it indoors or under cover to shield it from wear and tear caused due to poor weather conditions.
- Some non-toll routes may take about 5-7 minutes longer but can help you save quite a bit on toll in the long run.