Things to Consider Before Buying a Company Car

Buying your first company car is an exciting phase of your business. It means that it has grown, allowing you to propel your business forward.  There are a lot of things you have to consider before purchasing one though. For example, you need to calculate the costs that come with it including fuel, car insurance, maintenance, and more. Here are some questions you can ask yourself before making that big decision:

1.)    Do you need a company car?

Think about what kind of business you have. If you’re a plumber or electrician, you will need the vehicle to transport equipment to job sites. If your occupation is a consultant, your car would be more of a luxury than a need.

2.)    How will the company car be used?

If the plan for the car is solely for business purposes, then buying one would make more sense because you can brand it appropriately. Remember, it will act as your mobile ad.

3.)    How will you pay for it?

Once you’ve made the decision, you now have to decide if you would want to buy it outright or lease.

Although your business might be able to purchase the car outright, you might want to use the money for other needs. You can agree to a specific leasing arrangement which will turn your purchase from a capital cost into an operational cost allowing you to improve your cash flow.

Here are your options:

Chattel mortgage – In this agreement, the financier will let you borrow the money to buy the business car. Once you make the purchase, ownership belongs to you. The financier takes out a mortgage on the car as a security.

Finance lease – Here, the financier will buy the vehicle you choose, and you rent it for a fixed number of months. At the end of the rental period, you have a choice to take ownership of the car, trade it, or extend the rental period.

Commercial hire purchase – Under commercial hire purchase, you are given full use of the car as long as you make regular payments over an agreed period. You only become the owner of the car after you’ve made the last payment.

Operating lease – It works like the finance lease. But here, operating expenses are covered in the contract, and you just return the vehicle at the end of it.

4.)    What are the other costs to consider?

There are other expenses that you have to consider when buying a business car. You have to factor in petrol, car maintenance, and insurance. Knowing the cost of each would allow you to see how it would affect your company’s expenses. Compare different car insurance in to get the best deal.

5.)    Are there any tax obligations for company cars?

If your car is used primarily for business purposes and meets all the criteria of a work car, your company can claim GST credit for it. If the company owns the car, but you can use it for personal errands, you then apply the fringe benefits tax.

These are the things that you have to consider when buying a company car. It is essential to understand how making this decision can affect you and your business.

Better Retirement Preparation By Investing

Retirement is a time that needs to be prepared carefully so that one day we can still live worthy. For the generation that will face retirement must immediately prepare it well.

Not long ago, an investment company Capital Group conducted a survey entitled ‘Wisdom Experience’. Survey that saw the investment changes made by Baby Boomer generation from age 53 to 71 years, when entering retirement.

Performed APCO Insight in March 2017, it found five rules in the investment that are considered important for Baby Boomer. The rules are also important to understand for other potential investors.

As quoted Business Insider, Sunday(7/1/2018), the following rules:

1. Invest In Long Term

As many as 92 per cent of Baby Boomers think that they need to invest more to ensure retirement.

Four out of five believe it should invest consistently with a specific strategy. Then, 32 percent said they would change their strategy depending on market fluctuations.

The same thing also mentioned Warren Buffet in an article in the New York Times during the 2008 crisis. “In the long term, the stock market will grow well.”

2. Pay attention to what is invested

As many as 94 percent of pensioners say they want to understand what they invest. While 78 percent think that a simple investment with low risk is better in the long term.

3. Investment on Various Things

As many as 85 percent say that diverse investment is essential for a safe retirement. In other words, it should not invest all of its money on one type of investment like Bitcoin.

4. Protect Yourself from the Market Slump

About 80 percent said the importance of protecting investments and reducing the risk of losses when the market plunges. While 30 percent hope to know what to do in the face of such circumstances.

5. Saving More Early and Often

Meanwhile, 79 percent suggest to set aside monthly income for savings. As many as 60 percent of respondents also said the importance of investing since young.

Although young investors think that investing early on is very tedious, it can be more profitable.