Some occupations will require work vehicles to transport services and equipment to a client’s premises. Others, like say, consulting, may require you to drive to various locations on a daily basis. If you already own a business car or are in the market for one, there are a few key things you need to consider. Like any car, your business car will need to be regularly serviced. There are also specific tax requirements for business vehicles if you want to make a claim come tax time. Here’s what you need to know about owning a business vehicle.
Maintaining a business vehicle
If you made the decision to buy a vehicle for your business, chances are your business really depends on it. If this is the case, servicing a business vehicle is more important than ever. Servicing your business car will ensure it’s safe to drive, prevent malfunctions, lower maintenance costs, increase vehicle performance and prolong your car’s life. Keeping it in top condition will also keep the car’s resale value strong if you ever decide to sell.
When it comes to choosing a car repairer, make sure you do your research. The first step is to identify a trusted and qualified repairer. Then, you should evaluate their skills and experience, their reputation, presentation, warranties, licensing and memberships. More importantly, before making any decisions, get a couple of tailored (not standard) quotes for your business car – that way you’ll know exactly what needs to be done and what you’ll be paying for.
Keeping track of vehicle use for tax time
Keeping track of your vehicle’s use for business is crucial when it comes to tax time. It’s best to do this weekly or regularly, because it can be a pain trying to figure out costs of maintaining the car and kilometres it’s driven at the end of the financial year. If you use your own vehicle for business duties (including a car you lease or hire) you may be entitled to claim a refund. Additionally, if you use someone else’s car for work purposes, you may be able to claim the direct costs – such as fuel – as a travel expense.
To keep track of how your vehicle is used by your business, the best thing to do is to keep a logbook (even though there are non-logbook methods this is the most financially-savvy one) and record all the business trips you make, plus the personal ones if it’s your own car. Keep petrol, registration, maintenance and all car cost-related receipts.
Should you use your personal car or buy a new car for the business?
There are many factors to consider when deciding if you want to use your own personal car in your business, or if you would prefer to buy a new one for the business. Start by thinking about how necessary it is for your business to have a car. Do you do deliveries? Does your business service several areas you have to travel to? If the answer is yes and you choose to use your own car for your business, you’ll be putting extra kilometres on it, and this will decrease the car’s value if at some point you decide to sell it. It may also increase the chances of your car breaking down and needing additional maintenance in the future.
You should also think about who’s going to be driving the car. Will it be you, as a business owner, or your employees? As an owner, you may have more control over how many kilometres you put on it, but employees might not be as cautious and you may not be able to control the use of the car.
Looking after your business car
With a company car, whether it’s own personal car or a car bought specifically for the business, make sure you’re organised and on top of regular maintenance, and are keeping records and receipts for tax time. Additionally, servicing your business car is crucial to keep the car running smoothly and to avoid any unwanted costs related to unexpected repairs.