In the last few years, a lot of businesses are opting to purchase a vehicle in the name of the entity itself. This has become a standard practice for founders, CEOs, and other high-ranking executives of a business organization.
The question is- what are some benefits that businesses can hope to enjoy when they purchase the vehicle on a company name?
There is no doubt that the growth in this field is inextricably linked to tax benefits and breaks. In most parts of the world, governments consider this as an expenditure that the business makes and the same opens them up to deductibles and tax breaks.
In this article, we are going to look at business car ownership. If you are someone who is looking to buy new vehicles for your company Check out the cars for sale in Singapore.
Table of Contents
The Tax Breaks and other Benefits of Business Car Ownership
The first and probably the most important thing you need to know is the following-
- The company or business car becomes the asset of the organization and the costs for the same can be completely deductible from business taxes.
- Business ownership of a vehicle helps when it comes to controlling the depreciation value that is part and parcel of vehicle ownership.
Additionally, when it comes to insurance, a vehicle owned by the business is likely to command a lower price as compared to personal ownership.
Many dealerships offer discounts and benefits on corporate car ownership as they know that it can help them with future business prospects.
All this along with the major tax benefits definitely make business car ownership a very alluring proposition. Businesses can also choose between owning a car or leasing the same. Leasing a car further helps them with deductibles and depreciation values.
This is why most businesses prefer leasing a car for two-year intervals. LetsTalk Leasing It helps them with tax benefits and accords them of the aspiration of changing company vehicles.
Things to Remember when going for Business Car Ownership
- The Model and Manufacturer of Vehicle-
If you are not a lawyer on Wall Street, you might not want to go for a Lexus sedan or one of those German heavyweights. Understand what your primary need is and then proceed with the same accordingly. If you are looking to haul goods or moving them to trade shows, you might want to get a truck or a minivan. If you want to move people, a C-segment sedan is an option.
- Calculate all the Extra Costs that come with ownership-
A metallic paint job, fancy alloys, PPF protection, seat covers, etc. are just some of the options and add-ons that can make your vehicle ownership experience an expensive one. These are areas that you might want to consider. While it would send a positive message about the brand, it would also burden you with extra costs. It might also help in controlling depreciation.
- Pay close attention to your Business Car Insurance-
Businesses need to compare insurance rates and premiums on vehicles from different vendors, as a thumb rule, the insurance on business vehicles is lower as compared to personal vehicles. This is why you need to check with the dealership on the same. As company vehicles are taken care of in a much better fashion, they tend to depreciate less or get into accidents.
- Get the Business Vehicles from the Best Car Dealerships-
A good dealership will know that business cars can result in long-term engagements and partnerships. Businesses that tend to do well look to change vehicles every couple of years. On the other hand, for a business, it means better discounts, greater facilities, and better relationships. You need to choose a car dealership after doing a lot of research on your end.
- Choose between Leasing and Outright Purchase-
This is something that comes with its own sets of pros and cons. While vehicle ownership may be something that a few businesses would consider, most would want to opt for leasing. Leasing business cars is something that has now become quite mainstream. It helps you with lower running costs, minimizes depreciation, and allows you to switch to a new vehicle often.
The Bottom Line
If you are a stable and growing business and have wanted to get a new car, going the business car ownership route is the best option for you. If you have any other questions, that you would like us to answer on leasing, insurance, or selecting dealerships, let us know in the comments below.