OPERATING an SME can be difficult and keeping track of costs is crucial to managing the company finances.
With every penny being important SMEs may think that being able to run a company car would be too expensive or not cost effective. There are however a variety of ways that SMEs can save money when operating company cars.
Firstly, when SMEs are looking for a company car, the temptation is often to go for a new model. However, this can often be very expensive, not only in the initial expense of purchasing the vehicle but with insurance costs as well.
An alternative to this is exploring the second hand used car market. Some great deals can be found, and the range of cars on offer is extensive. The car will need to be fit for purpose and be in good condition to represent the company on the road if the SME is going to apply any branding to the paintwork.
A simple search online can produce a range of options for used car showrooms or online marketplaces. There is also the option to ask around to see what people’s first-hand experience of specific companies has been. Also, don’t be afraid to look a little further afield, if Edinburgh is the base of your SME you may find better deals if you for look for the best used cars Aberdeen has on sale, where the prices could be lower compared to Edinburgh.
Company cars have been a fixture of business for many years, and with proposed changes over the tax paid on fuel used in company cars, it is more important than ever to calculate the mileage travelled correctly.
Because of this utilising vehicle tracking could save an SME money. Advancements in GPS technology has allowed companies to produce tracking devices which, in some cases, can be activated by plugging the device into a 12v cigarette lighter.
The advantages of vehicle tracking mean that businesses can record highly accurate data on their vehicles and use this data for a variety of reasons. Having the ability to see the location of every driver in the fleet, along with historical data can allow fleet managers to very quickly generate mileage reports. The telematics data produced from these devices also generates reports on any speeding that may have taken place while the company vehicle was in use.
Using company cars during the workday is their primary purpose; however, some companies allow their employees to use cars for private journeys. Because there are now devices which do not need to be hardwired to the vehicle, drivers using a company vehicle for personal use can mask their personal journeys through accompanying apps or by just unplugging the device.
This allows employees who have been granted personal use of the car to feel free to use the car in their own time without feeling as though their employers are tracking their location.
The final option for an SME wanting to invest in a company car is to explore leasing a company car. This option allows companies to experience operating a company car for a period of time, without the financial commitments that come with purchasing a car outright. This can be beneficial if a company is unsure if operating a company car is right for their business, or if they need to test a range of cars to see which is better suited to their needs.
Leasing a car also allows businesses to avoid losses through depreciation as the car can return to the company you hired it from at the end of the agreed contract. This allows SMEs to avoid trying to recoup the investment spent when purchasing the car outright.
Some leasing companies also include maintenance fees in their contracts which allow businesses to avoid handling repairs should they be needed. While making contracts more expensive, it could still represent a considerable saving compared to the cost of significant repairs.
Overall, the decision to invest in a company car can seem daunting, especially for an SME. However, having taken the decision, there are a number of ways a company car can be operated, helping business, and not placing an unmanageable financial strain on the company.