If your small business uses cars for deliveries, transporting passengers or if you want to brand your vehicle with a company logo, it might make sense to purchase and register a vehicle in your business’ name. Company cars could also give you more control over things like GPS tracking, driving policies and more. Some companies choose to use mileage reimbursement instead of purchasing company cars, but when the upfront investment is worth it for your business, it pays to know the ins and outs of the registration process.
Business and Insurance Basics
In order to title a vehicle in your company’s name, you will need to produce articles of incorporation and show that your business is a legitimate organization. If you are a gig-worker who has not officially registered your business, this is your first step. You might also need an EIN number, credit profile and an official bank account for your business, depending on how you intend to pay fees.
Your small business will need to provide proof of insurance as part of the registration process for your state’s department of motor vehicles. Car insurance is different for businesses, and is often more costly, so contact your insurance agent to find out about pricing and set this up in advance. Once you purchase the vehicle, your agent will need to know the make, model, VIN, odometer reading and more in order to add the vehicle to your policy.
Transferring Your Personal Vehicle
Transferring your personal vehicle to your small business is often less involved than buying a car from a third party because you will be able to sign both the seller and buyer portions of the registration paperwork. However, if you still owe money on the vehicle that you plan to transfer to your business, you will need to contact your lender for the appropriate paperwork that could allow your business to take over the payments instead of you. Some lenders might require you to pay off the vehicle before a transfer can occur.
Buying a Car for Your Business
If you purchase a car for your business from an individual, arrange to meet them at your local registrar’s office to complete the paperwork together. This will give both parties peace of mind in knowing everything is done by the books. If you purchase the vehicle through a dealership, they often have individuals or departments that specialize in commercial sales and have all the right paperwork set aside in advance. Should your business obtain a loan to finance a vehicle, keep in mind that the lender’s name will be listed on the title and not your business’s name.
Paperwork, Fees and the DMV
The paperwork and fees required to register a business vehicle vary slightly from state to state. In any state, be prepared to offer proof of insurance, as well as identification for you and your business. For example, in the state of North Carolina, the following 2019 paperwork and fees are necessary:
- Vehicle title or certificate of origin
- Title Application
- Odometer Disclosure Statement
- Damage Disclosure Statement
- Proof of insurance
- Identification
- $52 Certification of Title fee
- Highway-use tax
- $36 registration fee
- County fees, if in Wake, Randolph, Durham or Orange counties
In contrast, the state of Minnesota has a simplified process, where odometer disclosure and damage disclosure are included in the title application. So, their requirements and fees are as follows:
- Proof of ownership
- Application to Title and Register a Motor Vehicle
- Identification
- Proof of insurance
- Fees that vary by age and type of vehicle
- Wheelage tax for some counties
Choosing the right auto insurance policy is crucial for your financial security. By understanding the types of policies, factors affecting premiums, and strategies to find the best policy for your budget, you can make informed decisions to protect yourself and your vehicle.
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