When you decide to purchase a car that will be used for both personal driving and business-related driving, it can be hard knowing whether or not to register the car as a personal car or as a business car. You may already know that there are some advantages to doing this, but you may not have all the answers, so we’re going to talk a little bit about that in this article.
Before we begin, though, a disclaimer is needed, as this article should not be your only source of advice on this topic. Always check with your lawyer to investigate all of the legal advantages and potential issues with putting your car in your company name to their fullest extent. Now without further ado, let’s take a look at putting a car under your business name.
A benefit of putting a car under your business name is that you can claim the cost of a new car as an asset which will bring a tax deduction for your business at tax time. Still, you need to be aware that when putting a car under your business name, you are required to keep track of mileage and how often it was used. This can prove to be a problem when you are also using the car as a personal car because you will still have to keep track of how far you drive the car. Before you decide that a tax deduction is enough for you to want to register the car under your business, make sure that you are prepared to do the paperwork to keep the car as a company car.
Another advantage that you will find from putting a car under your business name is that you can also put the car under your business’ auto policy. This will save you money not only because you do not have to worry about paying more for your personal auto coverage, but also because your business’ auto coverage will cover more than your personal coverage could.
Essentially, if you put the car under your company name, you don’t have to worry about reaching a policy limit. In addition to that, many personal umbrella policies do not cover accidents that occur during a business endeavor, so using your company’s auto insurance ensures that you are covered in the case of an accident while on a business excursion. Before you make any decisions, though, make sure you have a good understanding of your company’s auto insurance policy and if they even have one. You definitely don’t want to be caught in that scenario!
Before you decide whether or not to put a new car in your company name, it is important to consider the legal and financial aspects of this decision. It is always a good idea to contact a lawyer before you make such a decision as they can guide you through all the pros and cons of putting your car in your company name.