As your business grows, you need new ways to expand and improve productivity. A great way to increase your business growth is by purchasing a company vehicle. Before you take the plunge, here are a few things you need to consider.
Choosing Between New And Used
This can be a dilemma for most business owners. Buying a new car will be more expensive, but it will have all the latest features and is guaranteed to be reliable. On the other hand, a used car will be cheaper and potentially cost you less on your insurance, but may not be as reliable.
Ultimately, buying a vehicle (or vehicles) for your small business will depend on your budget and how you envisage the vehicles being used.
Once you know which car or cars you want the next consideration will be deciding on a car loan. Specialised lending or leasing can be done using two major arrangements; either via a chattel mortgage or commercial hire purchase. A Chattel mortgage is where a financier lends you money to purchase the vehicle, but you have ownership of the vehicle upon purchase.
A commercial hire purchase arrangement is where a financier purchases the vehicle but will give you full use of the vehicle. You will then pay for a set period and once that is settled, the vehicle will be under your ownership.
Small Business Tax Break
In good news for small business, the $20,000 instant asset write-off has been extended into the 2017-2018 tax year. So “If you buy an asset and it costs less than $20,000, you can immediately deduct the business portion in your tax return.”
According to the ATO, you are eligible to claim the deduction provided –
- You have a turnover less than $10 million
- The asset was first used or installed ready for use in the income year you are claiming it in.
Confused? Don’t know where to start? Your Buyer can help. We specialize in fleet buying for small and medium businesses, whether you need one vehicle or ten. Contact us today to find out more.