Outright Purchase
Outright purchase is the method of paying for a vehicle in full with one payment. The price will be determined by a dealership, for vehicles that can be ordered from the factory or bought from pre-built physical stock piles.
It's a very popular method of acquiring a company car, but it is not necessarily perfect; while there are certainly advantages to purchasing a business car, it’s not a flawless system.
Pros and Cons
The big advantage that comes from buying a company car for the business is the issue of ownership. The vehicles are assets of the company and are treated as such, allowing you to sell if an employee leaves the business or even after a set period of time, recouping some of the money that was spent.
The big disadvantage to outright purchasing a company car is that you have to pay the total fee of the car in one payment up front (For paying in monthly instalments see Hire Purchase).
Whilst one payment can cut high interest rates, more often than not this will decimate your bank balance. Of course, it gets particularly tricky if you need to buy multiple vehicles too.
Things to Consider
It is important to remember that when you purchase a company car, you are assuming the responsibility that comes with ownership of the vehicle.
That includes organising the car’s insurance, maintenance and repairs as well as paying the cost of it all. Ultimately, the decision to go for an outright purchase or not depends on how long you intend to keep the car.
For example, if you only need it for a few months, then you’re better off getting a daily rental or short term car leasing deal. Company cars are usually more cost effective over longer periods of time, but you’ll need to figure out how long your journeys are and which cars will be best suited for them.
If you’re interested in an outright purchase, then make sure you’re in it for the long haul. Otherwise, leasing could be the better option.
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