Image is important to us, and it’s even more important to businesses. Being the face of a company, CEOs will want to represent that company in the best way possible, too.
Cars have always been an effective way to sell an image because of their prestige and physical presence. They grab attention, and their feat of engineering is always appreciated. What car a CEO drives may sound innocuous initially, but it really can be a big deal – even subconsciously.
If you take the idea to the extreme, it’s easier to see why. Turning up to a business meeting in a 90s Peugeot is going to be a sign that either your company is struggling, or that you’re not going to be doing business in a traditional way – perhaps a bit of a hippy, or a market seller. These are of course possibly unfair judgements, but to say we don’t judge would be a self-sabotaging idea.
On the other hand, if you have organised a meeting with a CEO of a small business you’re unfamiliar with, seeing them turn up in a $150,000 Tesla is going to instantly make you more optimistic that this company is a big deal – a success. Only 10% of ~3,000 people asked were unaware of what their CEO drives, proving that we do care – whether we know it or not.
Fortunately for CEOs, the options in the luxury car market are abundant. Bare in mind that a luxury car is not only representing your image, but your personality. Someone looking for a high-end Porsche will be saying to the world that they’re focused on speed and performance, whilst someone driving a Tesla would be showing that their personality encompases progressive innovation and sustainability.
The most common cars driven by CEOs
When it comes to exclusive cars that are driven by top CEOs, BMW and Mercedes seem to come out on top in terms of popularity. Mercedes CLS and BMW 4 Series Gran Coupe are coupes that are growing in popularity, and score pretty high in reliability. These strike a fine balance between speed and economy; understated and flashy; elegant but not obnoxious. Of course, trying too hard with your choice may work against you, as tradition is important for some industries (but not all!)
This is why the Rolls-Royce Phantom, a $300,000 car fit for Royalty, is a controversial choice. Whilst some embrace its show-stopping ability that oozes money and prestige, others consider it a little too flashy. This is why they’re more common among CEOs within financial companies, where personality and wealth has more tolerance to be expressed.
On the other end of the spectrum are mid-range Audi’s, costing around $85,000, which get away with being a luxury, elegant vehicle despite being affordable in comparison. These run extremely well with comfortable interiors, and a nice balance between sports performance and sophistication.
There is of course the allure of the Tesla that cannot be ignored. Not only is this an expensive, exclusive car that is fantastic for the environment, but Tesla itself is garnering mainstream popularity that would be a great image for a CEO. Additionally, the electric connotations are a positive green image too, and the car is built with integrity and prestige. Add on top of this the fact there still aren’t many about, and you would very much be telling people your company is ahead of its time.
BMW 3 Series are a very common car, but the Tesla Model 3 and Volvo S60 are quickly catching it up. These are built with a luxury interior in mind, and can be very reliable. The options are vast, and with more electric cars being developed, we will see more luxury options for EVs on the road soon.
Purchasing a car on finance through your company
Whilst you’re not at liberty to buy a car through your business if it’s for personal use, it doesn’t necessarily mean you must buy it through your business if the opposite is true. Given that the taxman wouldn’t be mad at you sidestepping more tax relief, you’re left with a choice of whether or not to purchase your car through your business or not.
What many people don’t realise is that most luxury cars you see being driven about aren’t 100% owned by the owner – and that’s okay. Not many people have $100,000 in cold hard cash ready to hand over for a car, so they choose to finance the car and pay monthly.
One advantage of purchasing your car through your company (as opposed to a personal purchase) is that you will have more options available to you for financing the purchase. Business vehicle fleet finance can actually be very affordable compared to unsecured loans, and even some private car financing.
Because the loan is often secured, with the car itself being collateral, lenders are more confident that you’re a less risky client. This reflects in the APR of the loan, meaning repayments are lower than many other forms of loans. Furthermore, your business may be able to offer more security, better credit, and better cash flow than yourself privately, meaning you’re in a better position to get good terms on the business financing and get the exclusive car you dream of.
Finally, business vehicle financing may be your only option. If you’re buying various brand new cars for employees, this is likely a very difficult and expensive purchase to make privately, or without financing – and would also run you into various other insurance and legal hurdles.
A relatively obvious, but important, advantage is that when purchased through the company, the cost of the car (and the cost of repayments) is a business expense. This depends on the country, but for example in the UK, one can reclaim 20% VAT from the purchase price. Not only the car, but so is the insurance, petrol, and any other maintenance costs. This quickly adds up and can really lower your tax bill and capital allowances at the end of the year.