 | Nate Evans is a 4th generation owner and operator of Evans Motors located in Pittsburg and Girard. Evans Motors has been in business and serving the area since 1935. For more information call 1-888-414-3890 or visit www.evansmotors.net. |
Cars, Trucks, Vans & Automotive
2011-03-01 11:31:00
Fleet vehicles an option?
Question: I own a small company and we are in a place of growth. We need company vehicles, but buying new is not in the company budget yet. I am on the fence about spending the money, especially because we have grown the company by only spending within our means, but I can see the advantages. Any suggestions?
Answer: Actually, your question is now a common one for companies of every size. For every business, the questions become “How much will it cost, and what will it add?”
While new vehicles may be a little out of reach, Certified-Pre-Owned (CPO) Fleet vehicles are an excellent option even on an unlimited budget. CPO fleet vehicles are vehicles that have passed an extensive evaluation and come with extended manufacturers’ warranties.
These vehicles can give your company the streamlined, branded look of a large company without the same investment. Of course we all love the allure of a new car, but we also pay dearly for it. It is said that new vehicles lose an average of 20% of their value the instant they are driven away from the dealership. When combined with the average yearly depreciation of 7% to 12%, your first year’s loss is anywhere from 25% to 35%. This is equal to a first year $6,000 to $8,000 loss on a $22,500 new vehicle, or a $10,000 to $15,000 loss on a $40,000 one for a vehicle only driven the average 13,500 miles. If you drive more than that, your depreciation will be greater, up to 35% to 50% for the first year. Once you factor in financing, you will add another $1000 to $3000. From the investment point of view, this is a substantial loss.
Large corporations and government entities buy fleet vehicles to support company operations. Some of these companies purchase new vehicles regularly and liquidate the old ones, selling them to dealers. This presents the opportunity for smaller companies to purchase these vehicles and have the advantages of the big company look without the loss in depreciation.
