So, you’ve got a small business that requires the use of a vehicle. Perhaps you run a home delivery service, or maybe you’re a handyman that goes to people’s homes and needs a vehicle to store tools. Whatever the case, you have two main options when it comes to choosing your business vehicle.
Option 1: Use your personal vehicle.
Option 2: Invest in a vehicle that’s specifically for business use.
Both options are viable, but today we’re going to talk about the reasons you maybe shouldn’t pick option 1. It can have some benefits – such as saving money – but it presents a few drawbacks. Here are three reasons that using a personal vehicle for business use might not make sense:
Harder to claim tax deductions
Technically, as you are using the car to help you run your business, you can claim some expenses as tax deductions. This includes the cost of fuel, repairs, etc. The problem is that it’s harder to do this when your vehicle is also used personally. Here, you have to work out exactly how many miles were used for work, and so on. With a dedicated business car or van, you just take the miles on the clock and deducted that from your tax bill. It’s a lot easier and much harder for the taxman to dispute.
Better insurance options
When you have a business vehicle, you are entitled to get commercial auto insurance for it. Consequently, your car now has access to more potential. You can learn more here, but the general idea is that commercial car insurance has higher liability coverage limits than personal auto policies. This is because, if you crash your car into someone while working, the other party can technically sue your company. Your business has more assets than you do, so the other party could claim more compensation. Being able to have commercial auto insurance helps you get protected against these claims, ensuring your business doesn’t suffer.
More professional
A huge benefit of having a dedicated business vehicle is that it improves your professional image. Going back to the example of a handyman, which do you think seems more impressive and professional:
- Someone driving a standard car around
- Someone in a special van with branding on the sides
The second option clearly inspires more confidence in the business. It looks more professional and therefore trustworthy. You can customize business vehicles with branding, telephone numbers, your email address, and much more. In many ways, it’s an extra marketing tool for you to use! With a personal vehicle, you might not be able to do this due to the size of your car, but also because you still need it for personal use anyway.
Overall, using your personal car as a business vehicle isn’t always a great idea. In most cases, you will see more benefits if you invest in a business vehicle. Consider the aim of your business, then look at what type of vehicle will serve you the best. Whether this is an executive saloon or a large van, you’ll end up with a vehicle that improves your company.
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