Investing in a fleet of modern commercial vehicles can bring many benefits to your business. This includes the obvious benefits of powerful capabilities, custom upfits, and enhanced reliability, helping you get more work done faster. However, investing in your fleet can also unlock savings for your business through improved efficiencies, reduced operational costs, and numerous tax benefits. Our Hendrick Commercial sales teams are happy to walk you through your options when it comes to buying or leasing fleet vehicles and can explain how to maximize the financial benefits of your fleet. Here are some of the ways that investing in your fleet can help reduce costs and drive your business forward.
Upfront Savings
Purchasing a fleet of new vehicles represents a substantial upfront cost. However, buying or leasing multiple vehicles through the Hendrick Fleet Management program comes with substantial discounts, favorable financing terms, and vehicle life-cycle benefits. Manufacturers such as General Motors and Stellantis all offer special fleet programs that will help bring down the upfront cost of buying new vehicles for your business. These programs are not just aimed at large fleets with dozens of vehicles either; many manufacturers offer small business options designed to help procure and manage fleets of just a few vehicles.
Hendrick Commercial in partnership with automotive manufacturers makes buying fleet vehicles easier by extending commercial lines of credit to fleet customers. This removes friction from the buying process, allowing you to procure the vehicles you need when you need them and enjoy priority service and lower rates than retail customers. Manufacturers also offer special commercial lease options, allowing you to avoid the downsides of buying and selling by simply leasing the vehicles you require for as long as you need. These leases have terms tailored to commercial use and can help your business avoid the large upfront costs of buying new fleet vehicles entirely.
Operational Savings
One of the largest benefits of buying new vehicles for your fleet is the potential for substantial reductions in operating costs. Modern commercial vehicles are designed to be reliable, efficient, and easy to service, reducing the time and money spent keeping your fleet running. Fuel-saving technologies, from efficient diesel and gasoline engines to CNG, LPG, hybrid, and electric vehicles, can quickly produce significant savings by reducing fuel expenditures. Extended service intervals can also cut down on maintenance costs and reduce vehicle downtime, improving overall fleet efficiency.
If you do not want the expense of maintaining your fleet vehicles in-house, manufacturers offer fleet maintenance programs that handle preventative maintenance and repairs for your business. These service programs can be combined with available fleet telematics and management solutions, allowing you to optimize your fleet performance and identify inefficiencies. Options such as real-time vehicle tracking, route optimization, and more can help your business realize additional savings. Our commercial team can explore the available fleet management options with you, explaining how the available features can leverage your new vehicles for greater efficiency.
Tax Savings
One of the largest advantages of investing in commercial vehicles is the savings made possible by the numerous available tax benefits. Your business may be eligible to immediately deduct up to 100% of the purchase price of an unlimited number of qualifying new vehicles. Businesses and tax-exempt organizations that purchase a qualifying electric vehicle may qualify for a federal Clean Vehicle or Commercial Clean Vehicle income tax credit of up to $7,500, further reducing the cost of your fleet. We always recommend talking with your accountant about what tax benefits your business is eligible for, but our commercial sales team is happy to provide an overview of what is available.
Depreciation Deductions
When you purchase any vehicle for your business, you are allowed to deduct depreciation when filing your taxes. However, rather than making you deduct depreciation as it occurs over time, the IRS allows you to deduct it upfront when you purchase the vehicle. Section 179 is the most important tax benefit for fleets, allowing you to potentially write off the full purchase price of commercial vehicles you bought or financed that year when filing your taxes. Your business may be able to write off the cost of your GMC, Chevrolet, Jeep, Ram, or Mercedes-Benz commercial model. The highest deductions are for dedicated work vehicles and Class 4 or heavier trucks. However, there are also deductions for lighter vehicles and vehicles used for both business and personal use.
Operating Expense Deductions
Investing in modern vehicles for your fleet can reduce operating expenses, but you can also deduct many of these expenses when filing taxes. Everything from fuel costs to maintenance costs and insurance costs are potentially deductible if properly tracked. Taking advantage of available fleet management solutions can help simplify tracking these expenses to ensure you can take full advantage of this important deduction and minimize the tax burden on your business.
Lease Payment Deductions
Many businesses are taking advantage of the available commercial vehicle lease options because they simplify fleet management. While leased vehicles will not benefit from the Section 179 depreciation deduction, lease payments are considered an operating expense and are typically fully deductible when filing your taxes. If you are considering leasing a vehicle for both commercial and private use, you can deduct the percentage of commercial use. These tax benefits make commercial leases particularly attractive for smaller businesses and independent contractors.
Alternative Fuel Vehicle Incentives
Investing in alternative fuel commercial vehicles can bring additional federal, state, and local tax benefits. This not only includes electric and hybrid vehicles, but also options like CNG, LNG, and fuel cell vehicles. These benefits can take the form of tax credits, special incentives, and more. Many alternative fuel tax benefits also cover the installation of any necessary infrastructure, including charging and fueling stations, making it more affordable to switch your fleet to green energy. When combined with the lower operating costs that are often associated with alternative fuel vehicles, these incentives can make investing in an alternative fuel fleet an attractive option.
Maximize Your Savings With Fleet Vehicles
There are many financial benefits to investing in a fleet of modern vehicles, and our dedicated commercial sales teams will be happy to walk you through all of these advantages in greater detail. Upgrading your fleet can be a big decision, especially for smaller businesses, but we are committed to making the process as simple as possible. We offer a wide range of proven commercial vehicle options from manufacturers like Chevrolet, GMC, Jeep, Mercedes-Benz, and Ram, as well as fleet financing and management solutions designed to let you focus on your core business instead of taking care of your fleet. If you have any questions about our fleet options or the available tax benefits, give our team a call and let us provide the answers you are looking for.