How do small businesses afford private transportation?

[AllBiz]

Hi, when I refer to small businesses, I'm talking about cabdrivers, couriers, shipping companies, or other low-end businesses that don't make a lot of money, yet have a substantial need for private transportation. How do they get by without paying $100,000 for a Ford focus?

[sundaymorningstaple]

They go to work for somebody else. It's not easy and that's why a lot of companies are folding. And there will be a lot more to come as wages & wage costs are "forced" upwards by the government.

[PNGMK]

A lot of the ones I'm familiar with (motorbike shops, small businesses) rent commercial vehicles by the day when they need them.

[Strong Eagle]

You pay for those vehicles in higher retail prices from the merchants. You also pay for the excessively high rents, generated through real estate speculation, via higher prices.

Take Swiss Butchery, for example. Sure, it costs money to fly meat into Singapore. But the Swiss Butchery is being butchered by the landlord and you pay for it. And those delivery vehicles... you pay for them, too... the COE, the additional registration fee... the whole magilla.

[the lynx]

Most small companies go for leased vehicles under Goldbell and the likes anyway.

[Strong Eagle]

Most small companies go for leased vehicles under Goldbell and the likes anyway.

And the overall cost of the vehicle will be even higher under lease. The only saving grace is the several small companies can "time share" the vehicle. But, this doesn't work at all for companies like food delivery, dry cleaners, and pest control who have their vehicles on the road all day, every day. They have to own their own vehicles.

[the lynx]

Most small companies go for leased vehicles under Goldbell and the likes anyway.

And the overall cost of the vehicle will be even higher under lease. The only saving grace is the several small companies can "time share" the vehicle. But, this doesn't work at all for companies like food delivery, dry cleaners, and pest control who have their vehicles on the road all day, every day. They have to own their own vehicles.

You have a valid point. But they don't have to cover the maintenance, repairs and vehicle inspections, which can cost a lot for these small companies. Lease is high undoubtedly but it is more convenient.

[Strong Eagle]

Most small companies go for leased vehicles under Goldbell and the likes anyway.

And the overall cost of the vehicle will be even higher under lease. The only saving grace is the several small companies can "time share" the vehicle. But, this doesn't work at all for companies like food delivery, dry cleaners, and pest control who have their vehicles on the road all day, every day. They have to own their own vehicles.

You have a valid point. But they don't have to cover the maintenance, repairs and vehicle inspections, which can cost a lot for these small companies. Lease is high undoubtedly but it is more convenient.

Lynx - you can't get something for nothing, and that monthly lease payment will include maintenance, repairs, and inspections as part of the monthly charge, as well as a profit for the leasing company.

Leasing is always more expensive than buying because the leasing company has to pass through all the costs of acquisition and operation of the vehicle (or any equipment) plus tack on its own profit.

The only reason a company will lease is to turn capital expenditures into operational expenditures for accounting purposes, if the expected need for the asset is less than the asset life and resale doesn't make sense, or the company has no credit and no capital to purchase the asset outright.

[T Yang]

Buy Low Depreciation car and extend the COE when soften. Look at the classified sections

[sundaymorningstaple]

That used to be true, but in spite of the various measures, the COE doesn't look to be softening at all. I'd love to see is soften considerably as I'd like to take over the car I'm driving as I know it's full history and while it's a cheap Korean Kia, it's in perfect nick but only has a wee bit over 2 years left on the current COE but to renew the COE for 5 years would still cost more than the cars original FMV!

[T Yang]

The COE is in down trend. For economy car the saving is not significant, but for small luxury model one can save a fair bit. Let say you buy BMW 320i and drive for a year plus with $750 per month depreciation. When the COE goes to 20-30k net year, extending it will be worth while because means the depreciation is only about 5k per year or $400+ per month. The onus is to get a car with good maintenance/quality to ensure more trouble free driving for the next 10 years