Many businesses, regardless of industry, find that at some point they are in need of a company car. Whether you need just one car or multiple vehicles, if you are a business owner and considering buying a car for your company, it’s important to do your due diligence.

Here are the ins and outs from the experts that you should be aware of when looking to purchase a business car.

Is a company car right for you?

Some people rush into purchasing a company car without really considering if it’s right for them and their business. If you and your staff to a lot of driving, that’s obviously a good indication that a company car may be a good decision. But if you purchase before you really need to, it could adversely affect your business finances.

Ask yourself the following questions to determine if you truly need a company car:

• Do you drive your personal car more for work than not?
• Is your current car large enough to accommodate your business needs?
• Do you use your car for hauling equipment or delivering products?
• Are there tax advantages you can use if you buy a work car?
• Do you have enough money available to purchase a company vehicle?
• The answers to the above questions will help you decide whether it’s the right time for a company vehicle purchase.

Consider the drivers

One major consideration is knowing who will be driving the company car. Will it be just you or your staff members, as well? It is key to know your employees’ driving records prior to letting them get behind the wheel. If they have a bad record, your insurance cost could be adversely affected, and your liability, as well, should an accident occur. Also, make sure they have the correct license based on the type of vehicle they're driving. If they need to obtain a different license — for example, a commercial driving license — direct them to Driving-Tests.org, a site where they can practice various exams before taking the official test.

Your insurance rate will go up when you add your employees to the plan. Further, you should be sure that your insurer knows your plan for the company car so that you can get the best rate and coverage possible.

Tax benefits

It’s important to follow the rules when you get a company car. For example, the car should not be driven for personal use. Experts say if you do, you will have to note the car on your 1099 at tax time. Further, when using a company car for work, you need to keep track of the miles that are put on the car, as there is a per-mile value that you can use as a write off on your taxes. Experts note that deducting car costs on a per-diem basis is often times the best bet. You should consult the IRS website for detailed information.

Do your research

It is vital to research your options before deciding on a car that meets your needs. Searching online is a good place to stare to compare vehicle models and what they offer. You should also research the safety of vehicles. Many times, a certified used vehicle can offer the most bang for your buck.

Sometimes dealerships do not cater to smaller businesses. So researching options online is often your best bet. Most car websites are up to date with the vehicles that are available and the pricing. So seek out the local area that offers the best price you can get.

Above all, being well-informed is key to making the right company vehicle purchase.

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