When you are planning to purchase a car in the name of a business, it can be a very similar process to buying one in your name. However, the difference is you will be using your Employer Identification Number (EIN) to purchase it. There are advantages to purchasing it under your business name including the ability to leverage tax write-offs and the ability to do so using your business’ credit rather than your personal.
Get your business an EIN. If you are starting up a brand new business, you will need to get yourself an EIN for different reasons including the ability to file your tax returns. Having an EIN will also open up the doors to being able to establish a line of credit with your business and open up bank accounts. If you don’t currently have an EIN, you can apply directly with the IRS. Whereas, if you already have your EIN, you can note it down and go directly to the car dealer to make your purchase.
Figuring out the right car for your needs. You should be using the same buying criteria and the process you would use for your vehicle. Figure out what your business needs are and choose a vehicle that delivers it the best.
Enter the negotiation stage. You will want to negotiate the price of the vehicle no matter if it’s new or old. Entering negotiations is the same no matter the condition of the vehicle. When you have decided on a suitable price, you will want to inform the dealer that you will be purchasing the vehicle in the name of your business. They will ask you for your EIN and you will want to give it to them.
Get your car registered in the name of the business. If you find that you are purchasing directly from a dealer, everything that you need will be included in the purchase agreement. When buying from a private seller, you want to ensure that you have the bill of sale in the name of the business itself. You won’t have a form of a process with a private seller. Therefore, you want to ensure they have put the EIN on the bill of sale and take it to the DMV to transfer the registration to your business.
Keep every record of the entire transaction. You want to keep both the purchase agreement and/or the bill of sale to have it for your business’ tax records. You will find sales taxes can be deducted on business taxes and other ways to save money when it comes to getting corporate deductions.