Company Cars: What Does a New Business Need to Know?
Growing your business is a multi-faceted endeavour, requiring focus on internal growth just as much as external engagement. One of the principal ways in which you can reliably grow your business is in the attraction of the right talent – something which can only be achieved by offering the right environment.
Today, more workers than ever are aware of their value, and actively seeking businesses that reflect that value in their contract agreements. For many, the company car is an essential part of this agreement.
What is a Company Car?
A company car is a vehicle granted to an employee within a business, for both business and personal use. The business retains ownership of, or responsibility for, the vehicle. It is typically offered to enable employees to better carry out parts of their job description but can also be considered a perk of their contract.
Many company cars are given to sales and executive staff within a business, to properly enable them to commute to new and prospective clients or partners. They might also be supplied to employees where commuting is an otherwise essential part of the business – owing to office location or the specific nature of their working agreement.
The Business Benefits
On the face of things, a company car can seem like little more than a business liability; why not simply require employees to have their own vehicle? In fact, there are numerous benefits to adopting a company car scheme within your business, both in terms of your reputation and finances.
The major benefit to adopting a company car scheme is the attraction of high-quality candidates. By offering a generous scheme with access to a company vehicle, you can ensure a higher calibre of applicants for your role. Investment in company vehicles can also go some way to reducing your business's tax burden – though there are unique tax challenges for both employer and employee, based on factors such as fuel type and division of costs.
Key Routes to Financing a Company Car Scheme
Naturally, though, businesses will be reluctant to fund a company car scheme out of pocket – especially in difficult economic times, where cash holdings could prove more important than ever before. Rather than buying vehicles outright, though, there is a wide range of financing and leasing options that can mitigate the short-term impact of obtaining vehicles while allowing you to offer the scheme.
The most straightforward route for many businesses to fund their company car schemes comes in the form of a business loan. Approaching lending institutions for a loan enables your business to customise your agreement to your needs. You might wish for a secured loan against another asset, or you may be a growing business needing an unsecured loan.
Of course, there are also direct financing options with vehicle providers and showrooms. Various leasing options exist with different contracts and outcomes; a business contract hire would see your business hiring a vehicle for a pre-set period of time, where contract purchases enable your business to offset a purchase with a lease, followed by a final balloon payment.
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