Are Company Cars Worth The Investment?

2018-05-23T12:48:48+00:00

Businesses have lots of assets, and cars are high on the list. Not every company has them, which is what makes them desirable. Owning a fleet of vehicles says something about the brand as well as the state of the competition. On the flip side, they are expensive and not cheap to run. Plus, they need repairing when they break down. In short, there are pros and cons to investing in these business assets. Like the majority of assets, a company car is no different from any other. The question is, then – are they worth it? Or, is a fleet something businesses should avoid?

Brand Benefits

Don’t think of a car as a regular, get-people-from-A-to-B mobile. When a business owns one, it’s much more – it’s a brand booster. Firstly, there are the vehicles that shamelessly promote their name and logo on the side. Red Bull has to be the most obvious example. You may think this is tacky, but it works. There are millions of drivers on the roads and this technique helps to catch the attention of quite a few. Secondly, let’s not underestimate recruitment. A healthy wage is a start, yet employees want benefits on top. A car is a sign that they are making the right move.

Accident Potential

Cars crash more than any other vehicle on the planet. Granted, a fender bender never seems like a huge deal, but it is if you multiply it by ten. And, it isn’t as if scratches and scrapes are easy to avoid. Find out more about the topic by following the link and checking out the stats. As a result, accidents may cost the firm quite a significant amount regarding repairs. Unfortunately, this is only the beginning as there are knock-on effects, too. Where there is blame, there is a claim, so expect lawsuits to follow. Even if it’s a personal one, it will impact the business’s insurance policy.

Employee Loyalty

You know about using benefits to recruit candidates, but don’t forget the slip side. Recruitment is essential, yet so is keeping the quality workers that are already in your employ. Turnover is costly and contributes to a decrease in standards, output, and productivity. All three of these are factors in a loss of revenue. In the same way a recruit wants perks, loyal employees are identical. Therefore, using an asset is an excellent way to prevent people leaving. In many ways, it’s cheaper and easier than finding a replacement.

Cash Flow Liquidity

Assets are crucial because they help to increase a business’s bottom line. Putting money in a bank account to accrue interest is too slow. Investments are quick and keep the money-wheels spinning. However, bosses have to be careful not to splash the cash when there isn’t enough to go around. Regardless of the current situation, there should be a rainy day fund in case the worse happens. Owning cars, then, may mean you aren’t able to pay debts because the money is tied up in assets.

Only you can decide whether a car is a good or bad investment. Which side of the fence are you on?

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