Buying a new car for your company

Buying a new car is a major decision for a company: it is a long-term commitment that ties up significant capital. It is worth clarifying up front what the vehicle will be used for, the mileage you expect, and the operating model you have in mind.

A cash purchase, a loan and leasing each bring different advantages. Our expert team helps you compare the options so you can choose the best fit for your company.

What are the advantages of purchasing a new car compared with other options, such as operating leasing or finance leasing?

• The vehicle becomes the property of the company and can be sold at any time.
• Unlike leasing arrangements, a cash purchase does not involve interest payments.
• There are no leasing company administration fees to pay.

These advantages also apply to purchasing a used vehicle. However, while new cars are more expensive, they offer greater peace of mind regarding their technical condition, with no risk of undisclosed problems caused by previous owners.

Another advantage is that a new car can generally serve your business for longer than a used vehicle. A used car will reach an age sooner at which it may no longer meet the practical and aesthetic standards expected of a company vehicle.

It is also important to consider the potential disadvantages:

• Businesses generally purchase passenger cars at the gross price, and VAT on the purchase may not be deductible under applicable tax regulations.
• The company is responsible for covering all vehicle running costs and managing maintenance-related tasks.
• Significant capital investment is required, as new vehicle prices can represent a substantial business expense.

• Contact a dealership: If you already know which model you are interested in, contact your chosen dealership. If you are unsure which vehicle best suits your needs, seek advice from a sales consultant.
• Arrange a test drive: Once you have selected a model and decided on the equipment level, it is important to take the car for a test drive to experience its features and performance firsthand.
• Choose a financing option: After deciding which vehicle to purchase, select the financing arrangement that best suits your business.
• Sign the purchase agreement: Once the details have been agreed, the vehicle purchase agreement can be signed.
• Arrange compulsory insurance: Before using the vehicle on public roads, you must take out compulsory motor third-party liability insurance. Insurance premiums may depend on factors such as the policyholder's driving and claims history.
• Complete vehicle registration: The vehicle must be registered with the relevant Hungarian authorities, such as a government service centre.

When purchasing a new vehicle, it is important to account for additional expenses beyond the purchase price. These may include pre-delivery preparation, mandatory equipment, registration-related fees and vehicle acquisition duty.

Depending on the vehicle and the applicable charges, these additional expenses can amount to several hundred thousand Hungarian forints.

Long-term costs should also be taken into consideration, including company car tax, motor vehicle tax, periodic roadworthiness inspections and ongoing maintenance expenses.

Another important question is which type of powertrain to choose.

Diesel vehicles can offer better fuel efficiency, particularly over longer distances, and may retain their resale value well thanks to their durability and suitability for high-mileage use. However, diesel fuel is often more expensive in Hungary, and certain replacement parts and repairs can also cost more. Vehicle tax depends on factors such as engine power and environmental classification rather than fuel type alone.

There is therefore no universally superior choice between petrol and diesel vehicles. The best option depends on the characteristics of the specific models and how they will be used.

Electric company cars can also be an excellent choice. Although their initial purchase price may be higher, lower energy consumption and potentially reduced maintenance and servicing costs can help offset the investment over time.

If your company has access to dedicated parking spaces equipped with EV charging points, operating electric company vehicles can become even more convenient.