3 Factors To Consider When Operating A Business Vehicle

May 15, 2020 Geekopedia 0 Comment Assets, Automobile, Business, Car, Finance, Insurance, SIAM, Taxes, Transport, Vehicle. Revenue

With over 21 million motor vehicles purchased in India last year, an expected 53 million automobiles are expected to be sold by 2021, according to SIAM India. With the rise of fleet and transport services, businesses across the globe are looking for ways to scale and expand their assets. However, if you’re interested in procuring a vehicle for your business, there are a few things you should know. Check out these 3 factors to consider when operating a business vehicle.

Determine The Needs Of Your Business Vehicle
Before purchasing a business vehicle, write out a list of the functions you will need in your purchase. If you want to take a more generalist approach, however, you can try your hand at modifying an average sedan or van to perform a variety of functions. Whichever approach you choose, gather as much information as you can from a reputable car review site to help you determine which vehicles will serve you best.

Taxes and Financing
As with any business asset, financial statements, taxes, and potential tax deductions are key considerations when it comes to business vehicles. Cars considered as business assets will have to be included on your financial statement. This should include all relevant financial information, such as the total cost of purchase, liabilities, and value of depreciation.

It’s important to make the distinction that your car is a business asset as soon as possible, as this opens up the possibility for tax-deductible expenses. Such deductions are based on the government’s definition of a “reasonable business expense”. This is usually a certain value per unit distance, depending by car type and other factors. Governments usually give businesses the choice of deducting taxes on a per-day basis or based on the total amount spent.

Driver’s Safety & Performance
Whether you or a person you hire will operate the vehicle, safety and performance should remain a prime concern. If you are looking to hire a driver, pay attention to their professional record. This minimizes the possibility of accidents, as well as liability costs and insurance rates.The more employees you allow behind the business vehicle, the more liability you take on. Since insurance rates increase with the number of vehicle operators, it will be wise to streamline your roster of employees who regularly use company vehicles.

For many businesses, vehicles are a necessary expansion towards a more lucrative revenue. As with any business asset, they require careful thought and consideration before and even after obtaining them.

Photo by Simon Caspersen on Unsplash