This article is mainly aimed to help everyone in the business world and that includes professionals in the makeup industry, beauty and fashion, hospitality and those who consider themsleves self employed.
Oftentimes, drivers will hear the term “car finance” and assume that it covers different vehicles to the more traditional models, how about “Business car finance”. But this would be a misguided point of view to have, because in actual fact, when it comes to the cars themselves, there is a major if not a complete crossover between “normal” car finance plans and those which are business-focused. But what is the difference, then? Let’s find out.
Let’s take an example of a mobile hairstylist who has clients across the major UK cities like London, Birmingham, Manchester, Liverpool just to name a few and needed a car but didn’t have the cash to pay a lump sum for the van or normal car to be able to run her/his business successfully. What options are there for her?
Indeed, the difference between a traditional car finance plan and a business-focused deal is not about the car itself but about its purpose, and about how the payment plan has been set up in the first place. For a typical car finance plan, the driver is solely responsible for taking the car out and about, covering payments and so on. When it comes to a business car finance plan, however, the company is taking ownership of the vehicle for the duration of the plan (assuming it is not a plan that involves merely hiring the model, in which case the company will be responsible for it, but the finance provider is still the official proprietor).
Now, one would assume that, in such a case, the business would purchase the car and then allocate it to an employee, but that is another misconception. Generally, it will either be the employee who is considering a car purchase that would approach their company about initiating a deal where it is used merely for business purposes, or the company might suggest to a high-ranking member of staff or an employee that is regularly travelling to promote the organisation’s services that it would be best for all parties if they were to drive a company car. This makes things easier for the driver because, while they are getting to use the vehicle and are of course still paying, the business has entered into the agreement and thus will reduce some of the occasional headaches that can come from buying or looking after the vehicle.
What’s more, because the business would be involved in the deal, this means that there might be a greater range of car options to consider because the company would want the employee to help them to emit a particular image that could require a bigger-name brand of vehicle. Be mindful, though, that if the employee was to leave the company either of their own volition or by order of the company, then they could not bring the car away from the business. However, the organisation would still be covering payments of the vehicle up until the conclusion of the plan. An early exit might be negotiable, but oftentimes the business might then transfer the vehicle to another member of staff replacing the previous employee. The key message is that a business car finance plan can definitely be of benefit to a member of staff, but always remember that the company would have the power, especially if things took an unexpected turn when it comes to being employed by the organisation.
Hopefully, we have provided an insight into the pros and cons of a business car finance plan, but you can learn more by going to our website, which is www.rixmotors.co.uk.