My last blog spoke about VAT changes. In relation, its
biggest affect is on a vehicle purchase. Historically I bought vehicles about three
years old and they were preferably ex-company cars which had been on lease. The
reasons? They were well maintained, had been under warranty and had done most
of the depreciating in the price department.
In the last few years, I have realised two drivers sharing
one car generates more profit. The consequence is the car wears faster. That
wear can be expensive too, especially if you clock more than 60,000 miles a
year. For example a clutch could cost £1,500 to fix and another £2,000 in lost
revenue while off the road. Buying a second-hand car also means the inability to
specify certain features or colours.
In contrast, Mercedes Benz offer a three-year, unlimited
mileage warranty on a brand new vehicle. Add the advantage of reclaiming VAT on
the running costs and purchase price and it makes a new vehicle much more
appealing. With the volume of our work building and already supporting ten
full-time drivers, projecting figures over three years gives some interesting calculations.
If you consider our pricing structure adds 50% when carrying
more than four passengers, the extra revenue would help contribute toward a vehicle.
Additionally, Mercedes people carriers offer a potential 28,000 miles between service
intervals and they have solid residuals. With this in mind, a new vehicle doesn’t
look so expensive after all when calculated over three years.
