If you’re a small business owner, chances are you’ve got some sort of a vehicle that you use for your business on a regular basis –whether it’s a delivery vehicle or your own vehicle that you take to and from business meetings. Sometimes when that old truck breaks down, it’s difficult to know whether to replace it or opt for a brand new model.
If you’ve already spent several hundred, or even thousands, of dollars on repairs, buying a new vehicle may seem like a saving grace (and it could be). But, before you rush out to the nearest dealership, consider the following:
- If your old delivery truck was paid off, purchasing a new truck could mean a monthly payment on top of your other business expenses. If you are sinking more than $300/month into vehicle repairs already, however, a monthly payment very well could make sense.
- Depending on your state of residence, a newer vehicle will likely also mean higher taxes and registration fees every year. This is something you’ll definitely want to budget for.
- Take your best guess at your future maintenance costs with a new vehicle. A newer model will likely give you a few good years before any major problems, but if you’re going with an entirely different vehicle altogether do some research first. Be aware of a drastic difference in gas mileage as compared to your old truck or any well-known problems that tend to affect your new model after a certain number of miles. It would be quite the disappointment to purchase a brand new truck only to discover that that particular model tends to have transmission problems after a couple of years.
Thinking about fixing it? Depending on the severity of the problem, when your current truck is in the shop, there’s a good chance you’ll need to rent a truck while it’s being serviced. It could take days, or even weeks, before it’s finished and wind up costing you hundreds.
If you decide a new delivery truck makes sense for your business, be sure to look into commercial financing options. Before you get the first loan you qualify for at John Doe’s Car Lot, consider equipment financing – an equipment lease from a specialized lender like Direct Capital is a good place to start. Commercial financing, unlike your standard consumer options, won’t affect your personal credit and won’t put you as risk of losing personal collateral.
In the end, the decision to fix your old vehicle or buy a new one depends entirely on your own unique situation. Have you purchased a new business vehicle lately?