One good thing about buying a company car is that it makes some business operations simpler. It is also true that a large number of people are looking forward to owning company cars, but they are not sure if it will be the right move. 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.
First of all, you should consider or buy 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. Unfortunately, leased cars have mileage restriction, personalization restriction as well as incurring additional charges when you terminate the lease before expiry.
Apart from that, let us look at driving a business car. In this case, you will need to know whether you will drive yourself, assign an employee or staff member or hire a company driver. Like when you are a solo entrepreneur, you will assign yourself and assign an employee when you have many employees. In addition, when you need to track the business expenses, it will be better to have a driver that is in the staff as they can be instructed to use the car strictly for business duties. This will not be the case when you and your employees are driving you will find yourself in between personal and business travels.
Also, we also have business car insurance. It is essential to note that the minimum auto insurance coverage is not enough when it comes to business cars. In such cases when your driver involves in an accident the insurance company will ignore the claim, and the other party can also sue your company for damages in case your driver was on the wrong side. For that matter, it is necessary that you purchase enough business car insurance and also learn how to dispute a car accident fault.
Apart from that, we have tax implications of owning a business car. The good news is that IRS will allow you to deduct the costs associated with operating the car for business reasons such as driving between work sites, meet clients, attend business meetings and charity work.