It is essential to note that buying a company car will help you by making some business tasks to be easy. 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. Here are some of the points that will help you learn info about the bottom line of owning a company car.
Before you own a company car, you should know whether you want to buy or lease it. One good thing with buying a car is that it gives you complete ownership, you can as well customize when you feel like to market your business and many more. 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. On the other hand, leasing a car will allow you to drive without owning a car of which you will need to pay the initial deposit followed by monthly payments throughout the lease period. Unfortunately, leased cars have mileage restriction, personalization restriction as well as incurring additional charges when you terminate the lease before expiry.
Driving a business car is another decision that you need to make. In this case, you will need to know whether you will drive yourself, assign an employee or staff member or hire a company driver. In this case, when you are operating the business alone, you will assign yourself, and when you have several employees, you can assign one of them. 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. It will be challenging to separate business from personal travels when you or your employee is driving.
Besides, 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. Let your driver get involved in an accident with the minimum coverage is when you will see the insurance company avoiding the incidence and the other party can also sue you for damage when your driver was wrong. Therefore, you should purchase enough business car insurance and be ready to learn how to dispute a car accident fault.
Not only that but you should also know that there are 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.