What You Should Know About Owning a Company Car
You find that buying a company is essential as it will help in making some business tasks easier. But you find that there are people who are looking forward to buying a company car even though they are not sure whether it is a good idea or not. If you are looking forward to buying a company car, you should read more here for the things that you need to know about owning a company car.
To start with, you will have to choose between buying and leasing a company car. You find that buying a car is considered the best option because it gives you complete ownership and also allow you to customize it anytime you need to add value to your business market valuation. On the downside of it buying a car will require you to use a significant amount of money which can affect your business stability as well as spending on maintenance and repairs. One good thing with leasing is that you will have the opportunity to drive without owning a car where you will be required to pay an initial deposit to leasing company followed by monthly payments until the end of lease period. The disadvantage with leased cars is that they have mileage restriction, they don’t allow customization, and they will also charge you if you terminate the lease before expiry.
Apart from that, let us look at driving a business car. This will require you to know whether you will be driving the car yourself, assigning an employee, a staff or hiring a driver. Like when you are a solo entrepreneur, you will assign yourself and assign an employee when you have many employees. Besides, when you want to track business expenses, it will be better to have a driver who is among the staff who can drive under given instruction. But when you or your employee does it, you will find them mixed between business and personal travels.
Apart from that, you should also know about business car insurance. It is essential to note that the minimum auto insurance coverage is not enough when it comes to business cars. Standard insurance is not safe because when your driver get an accident, the insurance company will not be responsible and when your driver was on the wrong side the other party can also sue you for damages. Therefore, you should purchase enough business car insurance and be ready to learn how to dispute a car accident fault.
Apart from that, we have tax implications of owning a business car. It is essential to note that IRS allows you to deduct the costs that are associated with using the car for business such driving between work sites, meet clients, attending business meetings as well as using it for charitable purposes.