Buying a business vehicle is a significant financial decision, especially if you are buying a truck. Having a truck for your business can be extremely beneficial, particularly in expanding your operations and decreasing your transportation expenses. However, there are several factors that you have to consider to ensure that you are making the right call.
If you are thinking of investing in a truck for your business, here are the things that you need to consider:
First, consider the type of commercial vehicles that are available in your area. What is widely available will inherently affect your choices later on. For example, if there is a narrow variety of trucks available in your locality, you might have to factor in the transportation costs if the truck you want is in the next city or town. The same goes for industrial vehicles. If you live in a remote area, for instance, you will likely have to spend more to find the right truck or forklift for sale.
Buying vs. leasing
Buying a commercial truck can be more beneficial to your business compared to leasing. When you buy a truck, you get to own the vehicle and sell it at any time. However, the cash down and monthly payments are usually higher, often an issue for many business owners. If it’s not feasible to buy a truck as of now, you can choose to lease instead.
Leasing a vehicle is essentially renting it. When you lease a truck, you don’t own it, and you must return it at the end of the term. You don’t have equity on the vehicle, and you will have to pay charges if you decide to end the lease early. But on the plus side, monthly payments are lower, and you won’t have to worry about the truck’s depreciation since it’s not yours.
If you decide to buy instead of lease, you now have to consider your financing options. Unless you can pay upfront, you have to look into loans.
Generally, you have to have a good cash flow to secure a loan with a lender. If this is not the case for your business, it’s best to wait until your cash flow can handle the added weight of financing a vehicle. Moreover, you also have to have enough money saved for the cash down. At least the minimum percentage will do, but avoid taking out deals with a 0% down payment lest you want to pay more in the long run.
The engine is a crucial factor in any vehicle purchase, but it plays a huge role in your transportation costs for commercial trucks. Diesel engine trucks are typically more fuel-efficient than petrol trucks, so it’s best if you eye diesel vehicles for cost-effectiveness. If you’re looking for smaller trucks, you can choose from 4, 5, 6, or 8-cylinder engines, depending on your operational needs and budget, but these generally provide good mileage as well.
There are three main cab designs that you can choose from when buying a truck, namely: regular cab, crew cab, and extended cab.
A regular cab has two doors and allows a maximum of three people, including the driver. A crew cab has four doors and can sit around five people plus the driver. Lastly, an extended cab is more compact yet provides additional space for cargo. Full-sized versions can sit up to three additional passengers.
The type of cab you need will depend on your operations. How much cargo will you usually transport with every trip? And how many personnel do you need to be with the driver? Answer these questions first before deciding on the cab design you should get.
All truck drivers have the right to work in a safe environment. Thus, ensuring that the truck you buy has the necessary safety features takes care of this compliance requirement.
Unlike a few decades prior, almost all trucks today have basic safety features like airbags, seat belts, and side-curtain airbags. Still, it won’t hurt to check with the dealership or wherever you’re buying the truck.
Don’t forget to consider the maintenance costs as well. Before you buy a truck, factor in the expenses for the upkeep, including preventive maintenance, repairs, and any possible replacements that you might have to make.
The brand of the truck will also affect maintenance costs. If you want to keep these costs to a minimum, choose a brand that is relatively easy to maintain and has a lot of spare parts in your area.
A commercial truck can make your business more self-sufficient when it comes to the transportation of goods, which can help you save money and expand your operations in the long run. But before you start looking for a truck, make sure you understand these factors and consider them thoroughly to help you make the best decision.