There are several key benefits to financing a car or SUV in your business name.
Separate business and personal assets for better financial management.
Protect personal assets from business liability, and vice versa.
Benefit from tax advantages, like Section 179 and operating expense deductions.
Streamline accounting and financial processes.
Establish and build credit independently from the company's owners.
Obtain better insurance coverage with higher limits through commercial policies.
Simplify employee vehicle usage and insurance coverage.
As a company grows and becomes more established, having company-financed and titled vehicles is a natural progression. And now your successful company can take advantage of this very attractive benefit.
What are the main advantages of registering and insuring a company car under a business name instead of an individual's name?
Registering and insuring a company car under your business name provides better liability protection, as commercial policy limits are higher. It also separates personal and business assets, offers tax benefits, helps build the company's credit history, and simplifies record-keeping and financial management. It makes a lot of sense for a successful company.
What are the differences between commercial auto insurance policies and personal auto policies, and how do they affect coverage for company cars?
Commercial auto insurance policies generally offer higher coverage limits and better liability protection compared to personal auto policies. They are specifically designed to cover business vehicles and typically provide coverage for additional drivers, such as employees. Lower-limit personal auto policies may not adequately protect business assets in the event of an accident.
What tax benefits are available for company-titled cars?
A business titled/insured vehicle allows for tax deductions on depreciation, vehicle maintenance, and operating expenses. It may also simplify vehicle resale or transfer, and reduce personal property tax liabilities. In addition, some jurisdictions offer incentives or tax credits for eco-friendly or electric business vehicles.
How does financing a company car under a business name help build the company's credit history?
Financing a company car under a business name allows the company to expand credit history separate from its owners (which is important as a company grows). Similar to personal credit, financing in the company name and making timely payments builds the company's credit. In short, it further brings a successful company into its own.
How does registering a vehicle under a business name simplify record-keeping and financial management?
Registering a vehicle under a business name helps separate personal and business assets and makes it easier to track business-related mileage and expenses for tax purposes. This separation also simplifies record-keeping, as vehicle expenses are not mixed with personal finances.
Can I transfer a vehicle registered under my personal name to my business, and what are the tax implications of doing so?
Yes, you can transfer a vehicle registered under your personal name to your business. However, consult your
local DMV to determine if it will be considered a "same owner transfer" or a new "sale," as tax implications may vary. Some states may allow this transfer with minimal or no fees, while others may require you to pay taxes on the original full purchase price. Consult your DMV to determine if the transfer is worth the potential tax liability.
Do banks and equipment finance companies consider refinancing or sale-leasebacks of company cars?
Do banks and equipment finance companies consider refinancing or sale-leasebacks of company cars?
No, due to the unique risks and challenges associated with these transactions, banks and equipment finance companies avoid refinancing or sale-leasebacks of company cars. These challenges include high processing costs, time-consuming nature, diminished collateral value, credit risk, regulatory restrictions, and other factors that make it challenging for lenders to manage the risks involved.
Why are the credit requirements higher for this new Program?
This is a new one-of-a-kind Program offered by Crest Capital. No other lender we know of will even consider financing a corporate car or SUV in the business name without blanket liens or similar. As such, our regulators insisted we have strict requirements to launch this Program.
I want to finance a 100% work-use truck or a specialty work vehicle. Is that what this Program is?
No, you are looking for our
Trucks and Specialty Vehicles Financing page.
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