Should You Buy Fleet Cars for Business?

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One of the many considerations of businesses, especially those with operations that involve the transportation of people or goods, is buying fleet cars.

Fleet cars are groups of motor vehicles owned or leased under a business name or any other organization rather than by an individual or family. They are used exclusively for commercial purposes. Being commercial, these vehicles typically have higher mileage, tend to last longer, and have a slower depreciation rate than private cars. They are also often sold at a special discounted price, owning to the fact that several units will be bought at once, which bring fast profit to dealerships.

Fleet cars are often used by car rental and taxicab companies, public utilities and bus companies, police and law enforcement departments, and other organizations that rely heavily on cars to efficiently operate day by day.

But, will fleet cars provide great benefits for your business or will they only lead to financial jeopardy? To help you make the smartest decision for your company, we present the pros and cons of buying used fleet cars below.

Pros


Fleet Pricing

Getting special price discounts on purchased fleet is inarguably the biggest advantage of buying fleet vehicles. Corporate cars are usually offered at lower rates than personal vehicles.

Various dealerships provide fleet pricing, which is a special rate for companies that are purchasing multiple cars. According to the National Electrical and Communications Association, national fleet discounts are around 10-15% of a vehicle's value, which is around $3,000.00 to $6,000.00 depending on the vehicle cost.

Branding and Corporate Identity

Aside from fleet pricing, another benefit of buying fleet vehicles that almost all businesses want to take advantage of is the branding and corporate identity that comes with using company cars. Fleet cars can be uniformed to a specific type, make, and model.

  • Luxury brands, for instance, have their top executives drive only luxury company cars to meetings and events to reflect an affluent image that appeals to their corporate partners and clients.
  • Meanwhile, businesses that want their mobile workers to appear respectable but not flashy are provided with a standard, mid-level sedan.
  • Fleet vehicles that are customised with the company's logo, contact details and promotion also promote branding while on the road. This is common among service providers, like telecoms, electric companies, and water utilities.

Mobile Advertising

As mentioned above, fleet vehicles can be customised with paints or vinyl wraps that display the company's name and logo, slogan, contact details, and latest promotions. This is a cost-efficient way to fortify brand awareness and advertise its latest products or services.


Regular Maintenance

Fleet vehicles are typically covered by warranties and insurance against accidental damage and theft. This makes it easier and more affordable to get repairs and maintenance services. Warranties and vehicle insurance also require cars to be well-maintained and comply with the recommended maintenance schedules.


Convenience

Company cars provide convenience and comfort for your employees, as well as boost their morale. Aside from having more autonomy in their work, access to company-owned cars will also cultivate positive company culture. They do not just attract the very best talent to work for you, they also motivate your employees to work harder.


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Cons


High Mileage

Fleet cars typically have high odometer readings since they are often on the road and are used by multiple owners. However, high mileage doesn't automatically translate to trouble. It simply means that the cars have been driven quite a lot. If the cars are well maintained, they are more likely to be reliable because they are regularly driven.


Low Resale Value

Because vehicles with high mileage are stereotyped to be old, worn out, and unreliable, they usually have a lower resale value than the privately-owned version of the same used models. Hence, selling or trading them in for new models would be challenging and less favourable for you.


More Wear and Tear

Because fleet cars spend most of their lives on the road and in the hands of many drivers, they are expected to have more wear and tear on the engines, as well as on the interior and exterior body parts.

To minimise damage, always follow the regular maintenance schedule and educate your employees, especially your company car drivers, to take good care of the vehicles.


Is It Right for You?

The benefits that fleet cars can provide for your company are heavily dependent on the nature of your business. If having several vehicles can greatly improve your operations and sales, they may be wise to purchase. If you are just starting up and do not have enough money for the regular vehicle maintenance and needed repairs, however, you may need to focus more on growing your business first before buying a fleet of vehicle.



Got a great business credit score and planning to take out a loan to purchase fleet vehicles? We can help find the best financing deal for you! Ask us on 1300 722 210 or fill out the Loan Pre-Approval form now.


See also:

How to Know If You Can Afford a Car Loan

Car Loan or Car Lease: Which One Should You Get?

How to Buy an Existing Business

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