When starting a company fleet, the first reasonable thing you should consider is forming a solid business plan. It is vital to have a foundation of what you want your business to do and how you’ll do it.
Considerations include what methods you’ll use to acquire your vehicles and who will conduct maintenance for those vehicles. You may also want to consider how you’ll be funding your operation. Administrative and overhead costs are also factors to consider.
Consider fleet transportation
It’s essential to consider mitigating costs when purchasing a fleet of vehicles. It’s often cheaper for you to buy cars in bulk, meaning more than five, as it significantly reduces the cost of buying vehicles one at a time.
The problem with buying vehicles in bulk is that you may not find a good deal with local suppliers. It becomes difficult to transport vehicles that are far off from the business. If there are no local suppliers, business owners will find themselves having to hire an auto transportation company to transport these new vehicles to them.
It may be a good idea to consider getting a business loan or an expansion loan to ensure that you have the money to cover the costs of hiring a transportation company or even buying your first fleet of vehicles.
Run through ownership options
Having a fleet of vehicles comes with multiple options. While it may seem like you only have one expensive option, which would be purchasing a fleet of cars, you have several.
The first option people look into is the cost of the vehicles. Purchasing a car comes with many upfront expenses and has a few more drawbacks.
Assuming you purchase a fleet of vehicles to have ownership of them, you’ll have to consider heavy maintenance and upgrade costs. Owning a fleet means accepting that the vehicle’s value will degrade over time and requires constant care.
Leasing vehicles
A significant added expense is enough to deter people from starting a company fleet. Another alternative is leasing vehicles. Leasing has become favorable for a few reasons. The first is that upgrading those vehicles is as simple as renting the newer models when the time comes.
Keeping up-to-date vehicles may prove helpful in a commercial fleet. While having access to constant upgrades and up-to-date vehicles, leasing still has drawbacks. You will be paying a fee without actual ownership of the cars and taking responsibility for any damage and mileage fees.
There is an alternative to both renting and leasing as a hybrid option. You would rent a vehicle until you paid it off in full and then own it. Novated leasing Australia and the rent-to-own option are very popular with start-ups because they mitigate many costs.
Insurance and maintenance
Costs for cars add up over time. It’s important to understand that even after paying for or renting a vehicle, there will still be expenses such as insurance costs. Insurance costs vary, but typically the bigger the vehicle, such as a truck, the more insurance will cost.
Maintenance fees will also continue over the vehicle’s life if you choose to buy and own your fleet, but getting around these expenses means looking for good insurance options and scouting your drivers to ensure that they are fit for the job.
Wrapping up
For many, starting a company fleet is a worthwhile investment. That said, you’ve got to know what to look for and your options. Once you have that set, you’ll be on the road to success in no time.
