If you use your vehicle primarily for business purposes, you may be wondering whether you should register as part of your business or keep it registered as a personal car. There are some advantages to this regarding car insurance and taxes; however, this decision isn’t right for everyone.
Also, it’s a great idea that you talk to a lawyer before making any moves, such as registering your vehicle under your business name. But otherwise, this article will provide you with the knowledge you need to make an informed decision that fits your circumstances the best.
Should I Register My Car Under My Business?
When you use your car for business purposes, it begs whether or not you should register your car under your business. However, there are a few things to consider before doing this, such as:
- Any laws regarding a vehicle that is registered under a business name
- How often you use your car for business purposes
- If you meet the criteria to gain the advantages of this action
The answer to this question is not a simple yes or no. Therefore, we’ll talk about a few points that will help you decide if this is the best move for you. Furthermore, we’ll explain a couple of the advantages one can expect if they choose to do this.
Laws About Registering Your Car Under A Business
Different states have different laws and stipulations that govern whether you can register your car under your business. For instance, some of these stipulations can include:
- You can’t drive on the weekends or after a specific time in the evening
- The car must be used at least 85% of the time for business purposes
- You cannot use the car at all for personal errands
Every state has different guidelines regarding this, so you must check with your local authorities to understand the policies surrounding your situation.
Advantages Of Registering Your Car Under A Business Name
Now, suppose you decide to register your car under your business name while strict stipulations surround that circumstance. In that case, there are incredible advantages you can expect to experience that are listed below.
Save Money On Car Insurance
If you put your car under your business, there is no policy limit. For example, a personal policy may state that any accident is not covered if you were using your vehicle for business purposes. On a business policy, this policy limit is lifted. Not to mention, you won’t be paying for two separate auto policies, which saves you even more!
Deduct The Price Of Your Car On Your Taxes
You can buy a new car and claim it as a business asset as long as you register it under your business. This means you’ll get a nice deduction around tax time. However, it’s crucial that you track the usage as they will require you to report the frequency of use and the mileage that you put on your car.
With taxes, it comes down to the percentage of use. For example, if you use the car 80% of the time for business and 20% for personal errands, you can only claim 80% of the purchase price of your vehicle on your taxes. It’s a lot of paperwork, so you will need to be prepared if you want to register your car under your business.