Should I Purchase my Car Corporately or Personally?
MARCH 19, 2019
Don’t always trust your gut feel – especially for decisions that are complicated!
The choice to buy a car personally or corporately is often written off as a minor decision. Surely the tax rules must be designed to come up with a similar tax result no matter where you purchase the vehicle. Wrong!
Recent examples for clients have led to results that might surprise:
One client was buying his dream vehicle for $170k – after we tried to talk him out of it – we did the work to figure out where to buy. In his situation and based on a home based business where he drives for work to clients the conclusion was that he would save $100k in tax by purchasing in his corporation. This was because primarily because his personal use was low.
Another client purchasing a modest $40k vehicle with heavy business use was far better off to pay for it personally and charge the company for mileage.
The lesson here is to do the analysis for major decisions and make sure your not missing an unexpected savings opportunity.