Rent or Buy a Vehicle
Should small business owners rent or buy a vehicle? In virtually any industry, there comes, a point where entrepreneurs will have to make some sizable investments to take their business to the next level and part with a not insignificant amount of cash. These investments can take many forms, but few can yield, a high return as getting your choice of vehicle right.
Some of the benefits
Aside from being a must-have if you work in a profession that necessitates the movement of large or heavy quantities of goods, the vehicle you arrive in says a lot about you to your clientele. Attractive branding and a clean and well-looked after vehicle, immediately lets your customers know that this is a business that takes pride in their reputation and can be entrusted to do a good job.
On the contrary, opting for simply the cheapest option or the quickest to acquire does the opposite, and projects a negative image of a business that cares only about getting things done as quickly as possible without a care for quality.
Why should you rent?
For businesses that only need their vehicle for a short time, then renting is the perfect option. This method sees the recipient of the vehicle pay a set fee to its owner of a specified period in exchange for its usage.
Once the length that the agreement is for ends then the vehicle is returned to the original owner, but if for example, you are a seasonal trader then you might not need such a costly asset all year round-you only pay when you need it.
Furthermore, by opting to rent, you can be more adaptive to new factors that determine what vehicle you need. If all of a sudden a new make or model is released that better suits your needs, then you can simply rent that variant rather than persist with a comparatively old or out of date alternative.
Also, should you fall on hard times, then having a rental agreement may serve you better than having a vehicle of your own, particularly if it would be an asset of little value that has depreciated substantially over time. Should this be the case then you have no obligation to renew and spend more money, and once you get back on your feet then the rental can be once more renewed?
Why should you buy?
While initially more expensive, outright purchasing a vehicle has many benefits of its own. Most obviously is the fact that once paid for, your new acquisition will not have to be paid forever again (outside of maintenance and fuel costs).
Outright ownership also allows you to make any modifications you might want to your vehicle, without having to worry about give it back once the lease expires. Therefore if you wanted to make amendments such as the branding we discussed earlier, you could do so, to customise it as your needs may change.
From a reputation perspective once more, being able to say you are the sole owner of a vehicle will carry weight in many circles. Being able to come up with the initial purchase sum is a testament to your success, that you have a revenue stream large enough to afford such expenses.
The size of this expense, however, doesn’t always have to be disclosed, and there are a number of dealerships and online marketplaces for commercial vehicles looking for buyers. These may not always be brand new but are still subject to the same regulations ensuring you won’t suffer any losses in terms of safety or any other aspect that comes to the fore when testing out a vehicle.
So which is it?
Rent or Buy a Vehicle? In actuality, neither buying or renting is inherently better than the other as different businesses in different circumstances have different needs. For those looking for a short-term asset then renting will meet your short-term needs, but buying it in its entirety early on will remove a persistent expense from your back.
Renting will allow you more flexibility, but buying permits you more leeway in adjusting the vehicle as you need it-so both approaches can make a case for adaptability. Buying, however, is unquestionably the more permanent of the two options, so perhaps a best of both worlds option can be used, beginning with renting and if successful, a purchase can come later on.
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