• Owning a company car involves four main costs: gas and maintenance, insurance, taxes and fees, and depreciation.
• Switching to an electric vehicle (EV) can save money due to increased fuel efficiency, lower maintenance costs, and access to government incentives.
• Fuel-efficient vehicles with newer technologies can help reduce emissions and save money on fuel costs.
• Look for discounts from local stores and online retailers to reduce gas, oil changes, repairs, and other related costs.
Assets are an essential part of any business. They can be tangible, such as equipment and property, or intangible, such as intellectual property. Companies should actively manage their assets to make sound decisions about using them most effectively and reducing risk. For example, one essential asset they should always keep an eye out for is their vehicle.
Your Company Vehicle and Its Costs
For many people, having a company car is a great perk. It allows employees to have reliable transportation for work-related activities without worrying about the cost of owning and operating their vehicle. But as with any major purchase, more costs are involved than just the sticker price. So here’s a look at the four high costs of having your company car.
Gas & Maintenance
Gas and maintenance are the most obvious costs of having your company car. Just like with your vehicle, you must fill up the tank regularly and keep up with regular maintenance such as oil changes and tune-ups. This could be a significant expense depending on how much you drive and what type of vehicle you have. The rising gas price can also contribute to even more costs for your business.
Insurance
Another essential cost associated with owning a company car is insurance. Most companies require that their employees carry liability insurance to cover potential damages if an accident should occur while driving for work-related purposes. This insurance can be pretty expensive depending on the coverage you choose, so it’s essential to weigh all your options before deciding on a policy that fits your needs and budget.
Taxes & Fees
When you own a company car, you may also be responsible for paying taxes and fees related to its ownership and use. Depending on where you live, this could include sales tax, registration fees, annual road taxes, tolls, parking fees, and more. These costs can add up quickly if you aren’t prepared for them.
Depreciation
The final cost of owning a company car is depreciation—or the value lost due to wear and tear over time—which can be substantial if not appropriately managed or accounted for in advance. Many companies opt for leasing vehicles instead of buying them outright to minimize depreciation costs over time; however, this option does come with additional fees that must be weighed against the potential savings when deciding whether to lease or buy your next vehicle for business use.
How to Reduce Costs
Thankfully there are various ways to reduce the costs of having your company car. Here are a few tips to get you started:
Get an EV
One of the best ways to reduce the cost of owning your company car is to switch to an electric vehicle (EV). EVs are becoming increasingly popular due to their improved fuel economy, lower maintenance costs, and access to government incentives for purchasing them. Additionally, you can get EV credits. These credits are based on the amount of electricity your EV uses, which can help lower your overall tax bill. This is a great way to save money in the long run.
Fuel-Efficient Vehicles
If you want a traditional gas-powered vehicle, you can save money by choosing a fuel-efficient model. You can also look for cars with newer technologies that help reduce emissions and improve fuel economy.
Look for Discounts
Check with your local stores or online retailers for discounts on gas, oil changes, and other repairs and maintenance. In addition, many businesses offer special deals or discounts for customers using their vehicles for work-related purposes.
Shop Around
Take the time to shop around and compare prices on insurance policies and other related costs. You may be able to find a better deal than what you currently have by doing some research and choosing the right provider.
By being aware of the costs associated with your company car and taking steps to reduce them, you can save money and help ensure your business runs as efficiently as possible. With a little planning and research, it’s easy to find ways to minimize the cost of owning your vehicle and ensure that it remains an asset to your business.
