The Pros and Cons of Having a Company Car for Small Business

by Michael Haberman on August 29, 2017 · 0 comments


There are both pros and cons for a business having company cars.

Today’s post is from my friends at Social Monsters.org.

While many different types of small businesses can benefit from having a company car, there are a number of things ownership should consider before making such a purchase. A mom-and-pop bakery, for example, that makes a lot of deliveries may find it useful to invest in a delivery vehicle that provides adequate room for its assortment of cookies, cakes and pies.

Likewise, construction companies whose employees go from jobs site to job site throughout the day would clearly benefit from having a small vehicle fleet. Of course, like many things in life, there are pros and cons to having company vehicles. But to help small-business owners determine whether investing in a company car or fleet makes good business sense, they may want to consider the following pros and cons:

Pro: Presenting the Best Company Image

Investing in a company car can impact how a business is perceived. If a bakery employee spends hours making dozens of cupcakes for a fancy wedding and heads off in a dirty, old beater car to deliver them, it may not provide the best image for the company.

Conversely, providing employees with a sparkling, clean and well-maintained company car — one that perhaps also displays your company name and logo — for legitimate business-related purposes not only shows you care, but also provides free company advertising and branding. And that can certainly help in attracting new business.

Con: The Cost

Still, costs may be an issue. More times than not, small-business owners, especially those who are just starting out, don’t always have piles of money lying around. Even if an owner decides to buy one vehicle to benefit their employees — and gets a terrific loan with a 0 percent interest rate — they may have to contend with a monthly car payment for several years to come. This can be an uncomfortable and unworthy cost consideration in some companies’ budgets.

Pro: Controlling Maintenance, Features and More

Safety should also be a top priority. When small-business owners purchase a fleet of vehicles, they can decide which safety features they feel are most important, as well as which make and model will be best for the job. Additionally, since these owners will be responsible for the car’s upkeep, including springing for regular oil changes, tune-ups and parts, they won’t have to worry if an employee’s older vehicle with bald tires will make it safely to a client’s office or home.

In order to make investing in a company car as budget-friendly as possible, small-business owners may want to consider buying necessary parts, including tires, from an online retailer. TireBuyer.com offers a wide selection of high-quality tires at various price points. Owners can then decide whether to have these tires delivered to their business, where they can be stored until they’re needed, or be sent directly to a local shop for pickup.

Of course, ownership certainly has the means to write off some or all costs related to investing in a company car. As TheBalance.com notes, small-business owners can usually deduct general business-related car expenses, including tire, fuel and maintenance costs, from their tax obligations. Thus, it’s important to keep careful records of any vehicle-related business costs.

Con: Lack of Choice

It’s no secret most people feel pretty comfortable driving their own vehicle over a rental or loaner. For example, if someone is accustomed to driving a small sedan, they may be nervous or unsure of themselves driving a huge truck to a job site. Likewise, if weather conditions are bad, they may prefer driving their own vehicle that offers better handling.

Or, as Motus notes, employees who experience chronic back pain may feel like their vehicle provides better support, or they may want to drive a car that has specific safety features for their kids. In all of these situations, employees may not like the idea of having to drive a company car, although employers may have to swallow some of their pride and allow for some exceptions.


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