May 11, 2024

Company Car Guide: Everything You Need To Know

There are many benefits to getting a company car. You can bring your company’s brand to the streets, expand your services, and enjoy some significant tax advantages. But sometimes it’s hard to know where to begin.

Company Car Guide: Everything You Need To Know: eAskme
Company Car Guide: Everything You Need To Know: eAskme

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To get you up to speed on all things company car related, here is a comprehensive guide for everything you need to know.

The Difference Between Owning and Leasing

The first question to ask yourself is whether you want to rent a car or own one outright.
  • Pros and cons of buying -Much like with buying a house, the purchase is seen as an investment. One day in the future, you have the possibility of reselling or trading-in your vehicle to partially recoup your initial investment. Unfortunately, unlike a house, cars are depreciating assets, which means they lose value over time.
  • Pros and cons of leasing - Many companies rely on leasing vehicles because the initial investment is much smaller. This puts less immediate strain on thebusiness, and any engine malfunctions could be covered under the lease agreement.

Company Car Taxes

Buying and leasing your company vehicle will come with different tax advantages. To name a few:
  • Buying an electric vehicle 

There are tax credits for companies who decide to go green and put a little effort into saving the environment. Electric vehicles eliminate gas bills, and they reflect a positive brand image for your company.
  • Deducting lease payments

 The amount of the monthly lease payment that you can deduct on your taxes depends entirely on how much you use the company car. If you use it solely for business purposes, you are free to write off 100% of the monthly payment. However, if you split the use between personal and business usage, you can only write it off partially.
  • Additional car expenses

When filing taxes, be sure to include all the additional payments that go into using a company car. This includes gas, repairs, tires, and any other expense made on the vehicle.
When in doubt about any of these tax benefits, be sure to always check with the IRS for the official guide on company car taxes.

The Car is an Extension of Your Company

Whether it’s sitting in a parking garage or speeding down the highway, remember that the company car is a reflection of your business.

This means you should consider what values your company holds and bring them to your choice of vehicle.

Also, employ strict guidelines for the company car’s usage.

Having your car pulled over for a speeding ticket will not only cost your company money, but your brand’s image will hurt for it.

Reliability and Safety are Key

When you pass off the keys to your employees, their safety and well-being are the company’s responsibility.

Always be sure to check with the National Highway Traffic Safety Administration to review safety ratings of the cars you have in mind.

And when looking up reviews online,research if any manufacturing problems have occurred.

Support the Local Economy

If you’re a business in Walla Walla, Washington then you should strive to work with companies in Walla Walla.

Supporting local businesses will not only improve the local economy (thus improving your own business), but you will save money by doing so.

Shipping and handling fees for new cars can cost up to a thousand dollars.

This number gets even higher if you’re importing from overseas.

Bottom line: Shop locally. If you’re based in Florida, finding a new Mercedes in Delray Beachversus shipping one in from La Jolla, San Diego would save enough money to justify upgrading those extra features.

New or Used

Deciding between buying used or new depends on your financial situation and needs. New cars are:
  • More reliable
  • Less inclined to break down
  • More expensive
  • Depreciate faster

By comparison, used cars are:

  • Less reliable
  • Fraction of the price
  • Have higher mileage
  • Depreciate slower
Most companies choose a new car specifically for the headache they avoid due to costly repairs and time spent with a mechanic.

That being said, there’s nothing wrong with finding a dependable used car for your business.

The Leap of Faith

Once you’ve spent the time researching and comparing prices, you’ve done all you can do to prepare.

The last ingredient is to test drive the vehicle, negotiate with the car salesman, and then drive away sporting your new company car.

If you have any question, feel free to ask via comments

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