There are a thousand reasons why you might want to take that almighty leap into the world of professionalism and buy you or your top-performing staff new company cars. Part of it is knowing that perks are an essential part of retaining your best talent, part of it is to replace the ageing vehicles currently sat at the front of your shiny offices, and part of it is to do with the cheap financing options out there; their deals gracing the big billboards between your place of peace and place of work.
However, if you are in the market for some company cars, there are some considerations that are worth pausing on for a minute or two before you commit your signature to a dealership’s dotted line.
So, without further ado, here are some of the main factors to keep in mind:
- You Can Only Write Off X Amount
If you’re hoping to use a new car purchase as a way of reducing your tax bill, it’s worth realizing you can only deduct the cost of a vehicle’s business use, which is either the standard mileage rate of 55.5 cents per mile or the actual costs. If you want to write-off the actual costs, then you can actually take depreciation, although tax laws restrict your depreciation write-off to a set limit depending on whether the car is new or used.
- Leasing Has Major Tax Advantages
If you’ve ever seen Ballers, then you’ll have come across The Rock’s phrase: if it drives, flies or floats, lease it. And he’s right. Not only is leasing a great way for you to drive a more badass vehicle for less, you can also enjoy some pretty cool tax advantages. One of these reads like this: if you don’t use the standard mileage rate, you can actually deduct the full amount of the monthly lease payment (so long as you use the vehicle entirely for business), as well as deduct the other costs associated with running the car, such as gas, oil, maintenance, and repairs.
- Educate Your Employees Better
It’s not just about whether you should buy or lease, or what car you should consider, there is a potential cost that you should never overlook and that’s the chances of an accident. Long hours, the temptation of checking work emails when on the freeway, getting tangled with a semi-truck; roads are just as dangerous as they have always been, especially with more and more drivers on them. That’s why it’s a good idea to have the law firm of William Bill Hurst on speed dial just in case something should happen, as well as regular seminars on road safety and the importance of practicing good driving. The last thing you want is for a business perk to become a crippling expense.
- Why Not Go Electric?
Whatever electric car you have your eye on – from a Nissan leaf to a Tesla Model S – you can take a tax credit of $7,500, which will reduce your taxes dollar for dollar. Of course, the small print changes from state to state, so make sure you are eligible for these sort of tax credits before treating yourself to something sexy but silent.