Buying a car for your business? 6 Things you should know

Buying a car for your business? 6 Things you should know 

Time to buy a vehicle for your business? No matter what kind of business you’re in, a vehicle purchased for commercial purposes can provide great tax breaks, make your business look more professional, and even provide features that make your professional life easier.

Before you buy a commercial vehicle, there are several things you should consider. After all, in your business, every dollar counts! 

  1. Your personal auto insurance will not cover business use of a vehicle! 

One mistake that many business owners find out too late is that personal auto insurance will often not cover the business use of your vehicle. When shopping for an HNOA or commercial auto insurance policy, make sure your coverage limits will be enough to cover not only your vehicle but all passengers (a work truck full of employees will need more coverage than a single-driver truck), inventory or deliveries on board, as well as liability coverage. Need help choosing the right commercial auto policy? Give Edwards Insurance Agency in Taylors, SC, a call today! 

  1. Calculate how often the vehicle will be driven 

Whether or not you need a company vehicle comes down to how often your business will use it. A brand-new delivery truck that’s only used once a year isn’t cost-effective when you could rent a truck for a day to make a large delivery. If you’ll need it every day, and a new commercial vehicle can provide more features/usefulness/convenience than whatever you’re driving now, a new vehicle may be a good investment. 

  1. Could you maximize tax breaks with a green vehicle? 

Want to save money on gas, save the planet, and pay less in taxes, too? Consider buying a hybrid or electric vehicle for your business. Beginning in 2023, a tax credit will be available to businesses that purchase electric or fuel-cell electric vehicles. This tax credit can be up to 30% of the cost of the vehicle, up to $40,000! That’s an incredible saving, not to mention the fuel cost savings on top. 

  1. Should you own or lease your commercial vehicle? 

While leasing can offer the convenience of not having to take out a loan and not having to put down a down payment, tax breaks and depreciation for commercial vehicles are only available on vehicles that are owned. Also, expect commercial auto insurance for a leased vehicle to have higher insurance premiums. 

  1. You can save a lot by buying used 

Everyone loves that new car smell, but not every business wants to plunk down new car cash. A new vehicle loses 15-20% of its value as soon as it is driven off the lot, so why not let someone else take that loss and you reap the discount by buying a used vehicle for your business? A low-mileage, mechanic-inspected used commercial vehicle can be every bit as reliable as a new one, for a much lower cost.