Cars and fleet – definition – Outright purchase

This is when an organisation actually buys the company car, usually in bulk for discounted deals, and loans it to employees. In this instance, employers are responsible for the administration and will also have to ensure, subject to employee contracts, that the car is adequately maintained, fit for purpose and is taxed and insured. 

As part of fleet management, employers also need to be aware of depreciation of the value of the company car. There is little on an organisation’s books that will depreciate more than poorly-selected company cars. While all new cars depreciate immediately, some lose their values much faster and at a heavier rate than others, so getting the choice right in the first place will save money.

The golden rule of car acquisition is to consider the vehicle’s resale value before purchase. Many factors come into play ranging from the badge on the bonnet and the correct shade of metallic paint, to the seat fabrics and the right selection of electronic bells and whistles.

 

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