Determine if leasing or owning is best
When business owners want to establish a fleet, they need to opt for business car leasing, financing or buying the vehicles outright. Leasing and owning have their upsides and downsides.
With any lease, you have to worry about damaging the vehicles and surpassing mileage limits. However, you’ll have the latest models and may be eligible for different tax advantages. For example, with an operating lease, you can typically subtract your full lease payments from your income statement or claim depreciation.
If you look at a commercial van or commercial trucks for sale and subsequently purchase your fleet vehicles, you’ll increase your company’s resources and enjoy more control over the transportation of your products. That can boost the speed and quality of your service, which can help you expand your business faster. However, you’ll also be responsible for the maintenance and upkeep of your fleet, which can be costly. Aging vehicles that show their wear can impact the image of your brand.
A hybrid solution, wherein you lease to own, might be the best choice depending upon your business’s needs. Certain lease types can allow you to expense lease payments for tax purposes, which may help your company save money as you're first starting out.
Discounts for bulk purchases
When you purchase or lease at least five vehicles, you may be eligible for preferred pricing, which is a discount that dealerships may give you for buying in bulk. Speak with a fleet vehicle manager about the discount pricing as well as the prices on cars, vans and commercial trucks for sale.
Your goal should be to obtain a fleet identification number (FIN) to have access to these discounts. You’ll be able to see the requirements for a FIN on the individual manufacturers’ websites, but typically it involves providing proof of your business' legality to the dealership and filling out an application before qualifying for the number. You may also have to meet specific conditions to enjoy preferred pricing, such as purchasing or leasing a minimum number of vehicles within a certain timeframe. Some of the other perks of your fleet identification status might include open-ended leases or discounted prepaid maintenance.
Once you find a deal that works for you and your budget, request a written offer from the fleet vehicle manager, and then look into small business fleet insurance.
Locating the best commercial fleet insurance
Small business car insurance can cost thousands of dollars per year. When you factor in larger vehicles like trucks and vans, and multiply the number of vehicles you have in your fleet, you’ll increase your small business fleet insurance premiums. If you decide to add more vehicles to your fleet down the road, that can also impact your commercial fleet insurance.
To keep costs low, carefully examine the driving records of all your employees and ensure they haven't been involved in any automobile accidents. This is to mitigate risk; a prospective employee who's been in multiple accidents may represent a liability. When you're operating a fleet, it's important to make sure your drivers pay careful attention to detail out on the road. You can bundle vehicles together on one commercial fleet insurance policy to receive further discounts.
If you’ll have drivers on the road carrying hundreds or thousands of dollars’ worth of merchandise, purchase a policy with physical damage and high liability coverage. Otherwise, if a driver gets into an accident, it could be costly.
By investing a few extra dollars into your policy, you’ll save more in the event of an accident. Consider buying roadside assistance to save money on hiring tow trucks to retrieve damaged vehicles.
Purchasing a company fleet is an exciting step for you and your small business, but it’s important to make sure your new vehicles are protected. Small business car insurance can meet your unique coverage needs. To learn more about Nationwide’scommercial fleet insurance, contact us today for a quote designed for your small business.