Buying a Commercial Vehicle

The steps for buying a commercial vehicle are the same as for buying a personal car, but the details of each step are different. Be prepared by knowing what to look for.

Define Your Needs

Commercial vehicles represent a large and varied group of cars and trucks. From a fleet of a dozen taxis to a one-van pizza delivery shop, not to mention buses, pick-ups or full size trucks, all these can—and often will—be in the category of commercial vehicles.

If your business is already set up, you have experience with what type of vehicle(s) you will need and whether it is considered a commercial vehicle.

If you are starting up a new business, that is a different story. You will need to carefully assess:

• How much you will need the vehicle in the course of doing your work.
  AND
• What the primary purpose is for that vehicle.

For instance, if you are on the road visiting clients most of the time, you will need and benefit from a very different car than if you have a delivery service.

You should also take a close look at your state's local DMV office guidelines for what constitutes a commercial vehicle. Different states have different requirements and limits on how much you can use a personal vehicle in the activities of your business without it being considered a commercial vehicle.

Finding the Right Dealership

As a business owner, shopping for a commercial vehicle is a different experience than shopping as a personal buyer. However, many of the same guidelines apply:

• Do your diligence in research.
  • If you know the type of car or truck you'd like, make sure you understand its MSRP, options, and various dealership offers prior to visiting a specific dealer. This will allow you to focus on the price negotiation rather than the details of the vehicle itself.
• Consider a dealership that specializes in commercial vehicles.
  • This type of dealer may be able to provide your business with special offers, especially if you are considering purchasing more than one vehicle.
• Separate the negotiation of the price of the vehicle from the financing of the vehicle.
  • These are two different tasks that each needs all your attention.

Paying for a Commercial Vehicle

Just as with your personal car, you can buy, lease, or finance a commercial vehicle. Since small businesses often don't have a lot of cash on hand, leasing or financing the vehicle is often the most common route taken. However, each has its pluses and minuses.

When you do the math to determine which option is right for you, don't forget to talk to your accountant. Lease payments and interest can be tax deductible in certain situations. Furthermore, the vehicle itself is considered an asset, which in some instances will depreciate through wear and tear—the expenses you incur repairing the vehicle can also be deducted and provide a further tax benefit.

Commercial Car Insurance

Special insurance for commercial vehicles is required and unfortunately is generally more expensive than for personal vehicles. Be sure to shop your commercial car insurance needs with several insurance carriers to make sure you are getting the best rate possible.