Buying or leasing a car will be the second largest purchase many of us make in our lifetime. In business we tend to make these decisions more frequently than the man (or woman!) in the street and perhaps this frequency leads to a more casual attitude toward the cost.
A recent survey proved that less than ten per cent of companies take into account the Total Cost of Ownership when making a decision to buy or lease a vehicle.
Buying or leasing a car will be the second largest purchase many of us make in our lifetime. In business we tend to make these decisions more frequently than the man (or woman!) in the street and perhaps this frequency leads to a more casual attitude toward the cost.
A recent survey proved that less than ten per cent of companies take into account the Total Cost of Ownership when making a decision to buy or lease a vehicle. In our industry this is also known as Whole Life Cost (WLC).
The most important element considered was the purchase price or the monthly invoice price by 64 per cent of respondents whilst only 33 per cent considered reliability as important. The latter were presumably company car drivers and not the accountant. That would suggest that the decision on the new car is an emotive one, no surprise there you say, but you would hope that a more balanced view would be taken.
The TCO or WLC value includes the purchase or lease cost plus all the real life costs – insurance, fuel, depreciation (which would be included in the lease cost) , interest charges if applicable, personal tax and employers NI. Wow, that looks like a lot of work, you are going to need new batteries for your calculator.
At Alpha Contracts we have access to all sorts of data, maintenance running costs, tax tables for employer and employee as well as future values. Why not talk to us when you next think about a new car or van and we can provide you with the information to help you make an informed choice, or you could always choose the red fast one with a German badge!
In this month’s Business Times you will also find our seasonal flyer, please don’t put it in the bin as it costs our boss Lynette a lot of money. Keep it in a safe place and when you next consider a new car or van use those figures as a starting point for your TLO calculation. Or just ring Alpha Contracts sales and we’ll do the maths for you.
Safe motoring
Ross Williams
Alpha Contracts Leasing Ltd
01604 586653