The benefits of a company vehicle for small businesses

Whatever work a business does, small business owners typically conduct much of their daily business themselves or with a small team ‒ including travel.

According to Jerry Botha of the South African Reward Association, “if more than 60% to 65% of an employee’s travel is for business purposes, they are losing out by using their personal vehicle”.

This is because “typically, fuel only makes up 50% of the total cost of running a car”, while additional expenses like maintenance, insurance, or depreciation on the vehicle are not covered by travel allowances, reimbursements or fuel cards. Botha adds that “a highly mobile employee may also have to bear the early replacement costs of their private car”.

It is therefore in the best interest of both the employer and their employees to consider the tax benefit of owning a company vehicle.

Purchasing a company vehicle can be daunting, considering the major budget it requires. But, according to Renaldo De Jager, co-founder of auction.co.za co-founder, it doesn’t have to be.

The vehicle auction platform aims to alleviate some of the costs and risks involved in selling and buying cars. De Jager explains that small businesses can now buy vehicles online at a more affordable price without a dealer in the picture. There’s also less of a risk thanks to a focus on transparency, with all vehicle history, prior sales and general data available.

“You want sight of the service book and full history of a vehicle before you commit to purchase. You need to know if it’s been in an accident, where it’s been, what work has been done, and exactly how much it will cost you to keep it on the road. Too often, this process is not transparent. A car might look perfectly fine, but there are problems that are not visible to the naked eye,” he says.

De Jager adds that if you own your vehicle, you are able to brand it as you please to promote your business.

“This mobile advertising is immensely valuable. Just make sure you get a reliable vehicle because it’ll be much more useful to you if you are on the move, and not broken down on the side of the road.”