Welcome to Part 2 of our choosing the right vehicle blog series. Here’s a few more hint and tips to consider when choosing the right vehicle for your business.
New short-wheelbase vans range in price from about $28,000 to $45,000. The long-wheelbase versions are more expensive but boost the van’s earning potential, due to their ability to hold and transport greater amounts of parcels and packages in each load.
Balance the price against the van’s lifecycle cost—the total cost incurred during the life of the van. This includes not only the running costs (e.g. fuel), but also financing costs, services and insurance.
Importantly, you need to ensure your income will be sufficient to meet the repayments on any vehicle loan, rental or lease you enter into (not to mention all your other costs).
New versus second-hand
A hirer or franchisor may require you to have a new (or relatively new) van, which will obviously have a bearing on the age of the vehicle you buy.
If you buy a second-hand van, you’ll need to accept that the service and repair costs will accumulate faster—and you’ll have to replace the vehicle sooner.
On the flip side, the finance payments on a second-hand van will be lower, improving your cash flow; and you won’t be as exposed to depreciation, which typically occurs more rapidly in the years immediately after purchase.
To check a second-hand van’s service and repair history, contact the relevant workshop.
Hiring a vehicle
An additional option for getting the vehicle you require is hiring a van.
Hiring a vehicle is generally more expensive that other options, due to it generally being viewed as the shortest term option. However, the hiring costs usually include servicing, registration and insurance expenses.
In most cases, hiring costs can be claimed as an operating expense, therefore claimable as a tax deduction. Other than the tax deduction, there is typically no additional benefits, such as building asset equity into your business and could therefore be considered ‘dead money’.
We hope this 2 part series helped you pick the perfect vehicle for you! If you interested in financing the commercial vehicle you choose, contact GoGetta on 1800 185 171.