Buying a car can be a bit of a minefield these days. Do you buy one outright or lease one? Should you go for used or new? Which extra features are worth having and which ones are a waste of money? But things get even more complicated if you are buying a car to use for work purposes. If you are self-employed and you need to buy a vehicle to use, there are some extra considerations you need to make. It’s not the same as buying a car for personal use but a lot of people make the mistake of approaching it in the same way. There are a few different options to think about before you make any decisions about your work vehicle. These are some of the main buying options to consider when purchasing a vehicle for work.
Buy it outright
The simplest way to purchase a car is to buy it outright with a lump sum. As soon as you’ve paid for it, you own the car and you are free to do whatever you like with it. There is a benefit here because you have an asset that you can fall back on, but this option isn’t realistic for most people and there are risks involved. Even if you run a successful business, cars are expensive and it’s unlikely that you have that much spare cash lying around. Cars depreciate in value a lot, so when you come to sell it, you will lose money. That means that your business is essentially losing money when you go for this option, especially if you don’t use the vehicle for that long.
Buy it on finance
If you want to own the car but you don’t have the money to pay for it outright, you could consider buying it on finance. Instead of paying the full sum, you pay a deposit and then monthly payments until the car is paid off. This makes the cost more manageable, meaning you can afford a more expensive vehicle. This is a good option if you want to buy an electric car to reduce your company’s carbon footprint, for example, because they can be very pricey. However, you will be paying interest, so the overall cost is higher.
Get a contract hire
When you buy a car, you are limited by what you can afford. This means people often buy used cars that are not in great condition, which is a big problem if you rely on it for work. But you can get a brand new car if you look for contract hire deals instead. When you get a car on a contract hire purchase deal, you pay low monthly payments for use of the vehicle for a set period. You can also add maintenance cover so you only need to pay the one monthly payment and everything is handled for you. This is ideal if you rely on it for work because the vehicle is always well maintained and you can easily budget the costs.
Reliability and cost are both crucial when purchasing a vehicle for work purposes. In most cases, contract hire is the best option because you can get a brand new vehicle without having to worry about maintenance.