Does Your Startup Need a Company Car?

Long looked upon as a symbol of success and luxury, a company car speaks volumes about a business’s capabilities. However, status alone shouldn’t be the only reasoning behind purchasing a company car for yourself or your employees. Before diving into a financial venture as big as purchasing a special vehicle for your business, you’ll want to weigh the pros and cons. 

Whether or not your startup needs a company car will vary from business to business. We’re here to help you make your decision with all of the proper forethought. 

company car

If your business transports large amounts of cargo a company car might be a smart investment. On the contrary, if your line of work requires minimal commuting, it may be an unnecessary perk. Using this guide, we’ll present the many questions you should ask yourself before you find new car dealerships in your area to purchase your company car. 

What are the pros? What are the cons?

Before making any business decision, you should carefully weigh the advantages and disadvantages of the new variable. While there could be a myriad of reasons that may entice you to introduce a company car to the business, you should be wary about the challenges you may face down the road. Let’s run through the pros and cons of a company car.


  • Provide specialized vehicles for the job
  • Branding opportunity
  • Convenience
  • Full control and oversight


  • Tax season can get complicated
  • The sheer amount of regular upkeep and maintenance
  • Increased risk and liability
  • Expensive upfront and/or ongoing costs

Is it an expense you can afford?

When it comes down to the wire, any potential purchase should be well budgeted for. Purchasing a car is an expensive venture—so it’s only fair that you allocate time to figuring out how the upfront or ongoing monthly costs will affect your business’s bigger picture. And don’t forget to factor in down payments, monthly fees, and the price of insurance.

And what about maintenance costs? How will you budget and account for oil changes, tune-ups, brake fixes, and all other unexpected repairs? How do you plan on calculating and paying for gas costs? Purchasing the vehicle is just one facet of the process, the cost of owning the car is another that many business owners often forget to consider.

Is it required for business operations?

There are many important scenarios to consider when answering this question. For many types of businesses, a company car is necessary whereas others may not benefit as much. For those whose employees are almost always on the road for meetings or conferences, a company car could be a wonderful investment. For those who frequently transport large amounts of inventory or equipment in their car, a company truck or van can assist and ensure the safety of the transportation of said goods.

While there are a few tax credits that benefit businesses who employ company cars, the tax break shouldn’t outweigh the need for the car or the cost of the car. Should you decide that your startup company needs a company vehicle, consider looking into electric vehicles. Not only are they more eco-friendly than conventional cars, but they can earn you an even deeper tax break on your annual return.

Can you trust your employees?

Introducing a company car to your business and all of your hard-working employees requires trust. Since you will become liable for the vehicle, you’ll want to be confident that the car will be handled with care and professionalism. If your company employs young people under the ages of 21, you may want to first figure out who would be allowed to drive the car, and who you can trust to treat the car with respect.

company cars

The last thing you want to be is worried about driving histories while an employee is out on a 200-mile trip to an out-of-state client. Even your brightest, most trusted employee may have serious road rage that could turn you off from purchasing a company car.

Once you’ve considered all of these factors, you should have a clear-cut understanding of where you stand on your decision. Do you have any other questions, considerations, or concerns? Let us know what your decision-making process looks like in the comments below!

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