Company Car Mistakes All Firms Need To Avoid
A number of firms will often have fleets of cars that are given to their employees to facilitate with their work. For example, travelling salespeople will find it easier to visit clients in a company-supplied car rather than taking public transport, and senior management will often be given company cars as a benefit of their jobs.
For the most part, company cars are used for both business and personal reasons, and the cars that fleet managers lease for their employees are typically done so with a discussion of the cars that the employees want to drive. Unfortunately, giving employees too much freedom to choose what they want can often result in companies having to pay out more for their fleets than they need to.
If you have an existing fleet of cars or perhaps you are about to set one up, here is how you can make sure that your company doesn’t make any mistakes when it comes to leasing cars!
Have a set list of cars for employees to choose from
It’s no secret that some cars are going to be more expensive than others to lease and maintain, so it is important that you draw up a shortlist of cars that employees can choose from which won’t break the bank, as it were.
Diesel cars are typically cheaper for tax purposes than petrol ones, as are cars which boast low emissions figures. You should do some thorough research into the types of cars that are likely to be used by your employees, and lease the ones which offer the best value-for-money.
Don’t go for long leases
Whilst it may be tempting to go for a leasing plan over 4 or 5 years, the truth is that the car will cost you more to maintain over a period that is longer than 3 years.
It is also important to note that most car manufacturer’s new car warranties will not be longer than 3 years, and so the savings that you might make on first glance with a longer-term lease will ultimately increase your total cost of ownership.
Choose your supplier wisely
All too often I have seen examples of companies that have chosen leasing companies which offer inflexible terms, and typically end up costing those firms more money than they would have paid had they gone for a better leasing agent.
On the Premium Cars website, it says that a lot of companies don’t take the time to examine exactly what leasing agents can offer them, so it is important that you do some thorough research before choosing the leasing agent you want to do business with.
When you take out a business contract hire lease, you normally have to stipulate what your likely annual mileage is going to be. Obviously, the higher the mileage, the higher you will pay for your monthly instalments, but this increase in cost is typically much cheaper than having to pay excessive mileage penalties.
Be realistic when it comes to deciding how much mileage your employees will make in their company cars, and you won’t have to literally pay for any mistakes later on!
Image Credit: sisaphus