Without a doubt, when you want to own a company and use a car, you should consider a company car. While true, there are a few downsides, and you must know the risks. With this in mind, her are three benefits and three downsides to owning a company car.
Pros:
Taxes: If you want to do your taxes and keep everything in order, you should consider a company car. With a company automobile, you can easily write off all the expenses for the car. This includes fuel, insurance, tolls and upkeep. However, if you don’t use the car often, it may be a lot of work to write off minimal amounts of expenses. So, remember, if you want to use a company car and write off the expenses, you can save a lot of cash, but you must remember that it’s a lot of work.
Show it off: If you rely on workers to drive your cars or you use your own car, you are going to have a harder time to impress people not only that, if you have a company car for tasks like moving around a lot of people, you will struggle. Think about it, the average sedan is not that interesting, and you are going to have a hard time impressing potential or current clients if you don’t have a nice company car.
Easier to track everything: Finally, if you have a company car, you can easily keep track of the miles on the car. This is wise if you need to do so to write-off expenses or determine if a worker went to the site. Yes, if you are looking for an easier system, you will want a company car.
Cons:
Limited in miles: if you have a company car and want to drive to another state or a city far away, you are going to put a lot of miles on the car. Over time, when miles add up, you are going to have to pay, out of your pocket. This is costly to a lot of people who put on more miles then they thought they would. For this reason, if you are a frequent driver, consider buying a car. To many, this is reason enough to consider other options as it’s annoying for a business owner if he or she feels worried about every little trip.
Car accident creates problems: If you are involved in a minor accident, you are going to deal with serious issues when you have to file insurance claims. Yes, when dealing with a corporation and with your insurance, you will have an uphill battle when you want to get the most out of your insurance. Not only that, when you have to deal with the corporation, you can end up in court when a victim tries to sue your company for everything you have.
Driver safety courses: When owning a company car, a driver will have to take driver safety course. Not only is this time-consuming, but it’s annoying as you will have to waste a good weekend day sitting in class. Of course, it’s also costly as the classes are not cheap. Simply put, with traffic school, you can learn a lot, but you will have to spend a lot of money on classes and a lot of time out of the office.
If you run a business and want to save money, you many to get a company car. However, depending on your circumstances, you are wise to consider other options as it’s not always cost-effective to get a company car.