You only have limited options when you need a car for business purposes. You can use your vehicle, buy a new car, or buy a used car. Each choice has pros and cons, but overall, it’s better to buy a used car for the following reasons.
1. Used cars are abundant and affordable
Perhaps the biggest benefit of getting a used car dedicated to conducting business is that used cars are more affordable, and there is an abundance of available vehicles. “Unlike 2020-2023, when the pandemic caused used car prices to skyrocket by up to 40%, the market is finally stabilizing, and prices have come down,” says Tiger Okeley of Oak Motors. “It’s a buyer’s market for used cars right now.”
Depending on what you need to use a vehicle for, if you’re on a budget, you could potentially get a reliable used car for under $10,000 that will meet your needs and last a long time.
2. You’ll avoid excess wear and tear on your regular vehicle
Driving frequently for work or traveling long distances will take a toll on your personal vehicle. Having a separate business vehicle will reduce the impact on your regular car, making it last longer.
Granted, getting another car for business will be an added expense, but it’s easier to deal with than managing random repairs that pop up because you’re driving too much.
3. A separate, used car is easier to track for tax purposes
When you use your personal vehicle for work, you have to be specific about how you deduct that use from your taxable income. For example, you can only deduct mileage driven for business purposes, and if you tend to run personal errands between meetings with people, that can get sticky.
Sharing a vehicle for personal and business purposes will force you to perform many tedious calculations, which can make you want to estimate the numbers instead. However, if you get audited by the IRS, estimations can bite you in penalties if you estimate too high. It can also be problematic if you can’t tangibly prove the legitimacy of those deductions.
By getting a separate, used vehicle for conducting business, you don’t have to perform so many tedious calculations. You can deduct the cost of the vehicle; you’ll know that any mileage was for business purposes, and you can deduct the cost of maintenance and repairs up to the amount allowed by the IRS without having to split it according to how often you use the car for personal purposes.
4. You’ll spend less money on insurance
A car is just a tool for transportation when you need to get from point A to point B. There’s no significant advantage to buying a car and driving it off the lot with close to zero miles on the odometer. Doing it this way will cost you more in the long run. For example, the car will lose significant value the minute you drive it off the lot, which is money you’ll lose later when you sell the car. Buying a used version of the same model is smarter, even several years older.
New cars are also more expensive to insure than used vehicles. Buy a used car, and you can cut down on your operating expenses.
5. You can find nice used cars
If you need to use your work vehicle to drive clients around or just want to make a good impression, if you buy a used car, you can make that goal more affordable. For example, you won’t need to take out a huge loan to buy the latest luxury car since you can go to a dealership and get an older model. Not all older cars look out of date. Some luxury vehicles, like BMW, have tended to maintain the same overall look and feel over the decades. Curves change, but most older BMWs still look elegant and luxurious.
Make your life easy; Buy a used car
Having a separate vehicle for conducting business makes life easier, whether meeting with clients, running errands for your business, or responding to service calls.
Buy used car for business purposes to make life easier, especially regarding tax deductions.
