The Indian logistics industry works as the backbone of diverse small and big businesses. Not just that, it is estimated to be around 13% of I`ndia’s GDP.
If you run a transport company, you must know that buying a commercial vehicle is a complex process. Unlike purchasing a personal vehicle, you need to consider the impact of investing your money in a commercial vehicle, on your business. Similarly, there are other aspects, such as commercial vehicle insurance, carrying capacity and running costs to be considered.
A wide variety of commercial vehicles is available in the Indian market, which further adds to the confusion of making the right choice.
Before you plan to add more vehicles to your fleet, consider the following aspects:
- Load-Carrying Capacity of a Vehicle
You might have heard of transporters who only deal with heavy-duty goods. Similarly, others prefer delivering delicate but well-packaged goods.
Driving overloaded vehicles is risky as well as illegal. This may lead to hefty fines for carrying a specific volume of goods that is beyond the vehicle’s capacity.
In terms of business output, there is no point in investing in a carriage van if you know you need big trucks. So, it is crucial that you buy commercial vehicles depending on your business-specific needs.
Also, avoid comparing your fleet with that of your competitors when buying new vehicles.
- Operational Cost
Commercial vehicles usually cover thousands of miles regularly as a part of transporting goods to different destinations. Ultimately, their operational cost, which includes fuel, regular maintenance and services, has an impact on your business.
Buying a vehicle that has a lower fuel efficiency than required will ultimately increase the cost of fuel per trip. As a result, it will cut down on your profitability in the long run.
Therefore, it is vital that you consider all the factors governing the total operational cost of a vehicle before buying it. Your final decision will contribute to the growth of your business.
- Cost of Buying Commercial Vehicle Insurance
Owning a big fleet of vehicles supporting your transport business also means you have the responsibility to safeguard them all. During transit, there is always a risk of meeting with a road accident. Plus, the cost of getting the damages repaired in such cases is considerably high.
With a suitable commercial vehicle insurance policy, you can avoid a financial hit to your pocket whenever an unfortunate event occurs. The cost of this policy depends on the vehicle you choose. So, make sure you also consider this expense while buying more vehicles for your fleet and choose a renowned insurer like Tata AIG to offer financial backing in case of uncertainties.
- Financing Options
The next big thing is to consider how you will pay for a brand-new commercial vehicle. As compared to a car, commercial vehicles are much costlier. It means you need to make a wise decision when choosing a way to finance your new vehicle.
Buying the vehicle in cash is one option. But it means investing a major portion of your capital all at once. A better financing option is a vehicle loan, which you can borrow from a bank and repay with interest in smaller EMIs.
Commercial vehicles you add to your fleet have an impact on long-term capital gains. Since buying a commercial vehicle is a big investment, it would be best if you make a prudent decision based on the aspects mentioned above. An alternative to a new vehicle is a used commercial vehicle if you want to save more.
