Many of us work for a company or are small business owners that require we go above and beyond the normal show up, work, and go home routine. You may be asked to attend off property meetings, fundraisers, or events. For those instances, you are usually asked or have the need to use your personal vehicle to get to those places. In most cases, that is easy and doesn’t require anything other than gas. However, if your job entails the constant use of your personal vehicle for company errands, client meetings, or commute between company properties, you may need to take into consideration all that it entails.
If you are using your car for more than driving to and from work, there may be insurance requirements that you should consider to keep yourself out of trouble. Depending on the nature of use and amount of driving required, you may be required to carry commercial insurance. Your personal insurance with an added exception may be enough to cover light use of your personal vehicle for business purposes, however, never assume you are covered without contacting your insurance company. This will help avoid the headache of denied claims in case of an accident and large citations for insufficient insurance coverage if pulled over by the cops.
Mileage, Wear and Tear:
A lot of consideration should be taken in the amount of driving required for business purposes. As you drive you are adding to the wear and tear of your vehicle as well as using extra fuel. This can cause the need for addition servicing such as tire replacements, oil changing, tune-ups, etc. Most companies fail to reimburse for any wear and tear caused to your vehicle during business use. Check with your employer before choosing to volunteer your personal vehicle for business use to see if they reimburse for mileage as well as wear and tear. The current standard for mileage reimbursement is between 50.5 cents to 58.5 cents-per-mile.
If you are using your personal vehicle to carry business goods, this will make you liable. In some cases insuring your goods during transit may be a smart investment. Even if your company doesn’t require insurance for you to carry the goods, it may be in your best interest to guard against damage or loss. Anything can happen during driving, and you may want to avoid the responsibility of replacement or repair of damaged or lost goods.
Not all considerations are negative. The positive to using your personal vehicle for business is tax deductions. However, the IRS requires you use the vehicle strictly for business use and never for personal use. Even if you use the car on the weekends for personal use, you won’t be able to utilize the deductions. If you use the vehicle strictly for business use, you can deduct all costs for operation and maintenance of the vehicle. If you use it for both personal and business use, you are only able to claim mileage as a deduction at .55 per mile, but only if you are not being reimbursed by your company.
Whether you are thinking of using the vehicle strictly for business use or for both business and personal use, take into consideration all that it entails. Check with your insurance company for any requirements. Be sure to check with your employer for any reimbursement programs or liability insurance requirements they may require. If you are planning to use the vehicle for your own business, you may be well off to have a vehicle intended strictly for business purpose.