Even if you plan on buying the vehicle with cash, you still need a formal business structure to put the vehicle in the name of the business. A sole proprietorship that has a business name registered with the state as a “dba” may be able to purchase and register a vehicle in that name. However, since you are still operating as a sole proprietorship, you’re still personally responsible for that vehicle.
Set up an EIN directly with the IRS for free using the IRS’s website. Go to https://sa. www4. irs. gov/modiein/individual/index. jsp to get started.
Depending on the type of business you have, you may need several different bank accounts. You’ll need at least one operational account. If you have employees, you’ll likely also need a separate payroll account. For retail sales, you’ll also want a separate sales tax account.
You may want to start with a basic business credit card. If you are a contractor or builder, you also may be able to get credit from suppliers. Retailers may be able to get credit on inventory purchases. Once you have credit, make all payments on time and in full if possible. This will help strengthen your score as well as give you access to additional credit. Ideally, you want to have a 720+ credit score to get the best deal. Keep in mind it may take 2 or 3 years to build up your business’s credit to the point that you can purchase a vehicle in your company’s name on favorable terms. [5] X Research source
Shop smart. Visit the dealership on a weekday, when salespeople are less likely to be inundated with shoppers. Towards the end of the month or quarter, you may get a better deal from a salesperson desperate to make a quota. [7] X Research source There are many pros to working with a local dealer, including a full vehicle history report, but there can be less room for negotiation when it comes to price.
For example, Ford requires you to have 15 cars in your fleet already, or have purchased 5 Fords in the past year. If you don’t need this many vehicles, fleet purchasing won’t work for you. Search on the internet for the fleet purchasing website of the manufacturer you’re interested in for more information if you want to pursue this option.
Dealers typically offer better financing options and slash prices at the end of the model year. The tricky part is that not all manufacturers debut their new model year cars at the same time of the year, so you’ll have to do some research to find out when new model year cars are being released so you can plan ahead.
Before you go with a lease, consider carefully how many miles a year you plan to drive the vehicle, and how long you intend to own it. For example, if you are using the vehicle for deliveries and will have it on the road for several thousand miles a week on average, a lease may not be the best option for you, regardless of the price.
If you offer pick-up or delivery services to the general public during the course of your business, your state may require higher liability insurance coverage. [12] X Research source
When you sign the documents, include your business title and indicate on all documents that you’re signing on behalf of the business.
You can get the application at your local DMV. Some states also make the application available for download online.
Some states require driver’s license information for all owners of the business. For example, if you own an LLC with 2 other members, you would need driver’s license information for all 3 members of the LLC. You also must provide proof of insurance for the vehicle before it will be registered. Check with the DMV or with your state’s department of transportation to make sure you have the necessary insurance coverage for your type of business. [16] X Research source
Other documents such as your articles of incorporation or organization, a partnership agreement, or employer tax registration may also be acceptable. Contact your state’s department of motor vehicles to find out what you need.
You’ll have to pay a fee for title and registration. You may also have to pay taxes. Call the DMV in advance to find out how much you’ll have to pay and what methods of payment are accepted. Make sure you pay all fees and taxes from a business bank account.
The DMV will inform you of the inspections you need to complete. You can also find out this information by calling in advance or checking the DMV’s website. Pay any inspection fees using a business bank account and keep your receipts.
Record the tag number in your business records as well. It can also be helpful to set calendar reminders so you’ll know when you need to get another inspection or renew your registration.
If employees pay expenses, such as buying fuel while making deliveries, make sure you reimburse them for those expenses out of company funds. Keep all receipts for vehicle expenses, including insurance, fuel, and maintenance costs. These expenses are tax-deductible.
