As a business owner, you may be wondering
As a business owner, you may be wondering if it’s possible to pay your auto insurance through your company rather than your personal expenses. Depending on the type of coverage you have, you can pay business car insurance through your company – here’s how it works.
Business car insurance, or commercial auto insurance, is a type of business insurance policy. You need it if you have a car – or any other type of vehicle – which you use for business-related purposes.
Business-related purposes include:
Whether you’re a salesman, a plumber, or a real estate agent, you could benefit from commercial auto insurance.
While the exact coverage depends on your policy, commercial auto insurance typically protects you against risks such as:
If you have more comprehensive coverage, you might also be protected against theft, vandalism, and uninsured drivers. You may also need other coverage, such as business liability insurance.
While there are similarities, they are not the same product.
If you have a car you use for personal and commercial purposes, you can update your insurance coverages to ensure you’re fully protected.
There’s a simple answer to this: yes, if it’s your business and you use the car for work-related purposes.
In tax terms, car insurance is considered an essential vehicle expense. So, you can claim the costs of insuring the car just as you can often claim the costs of:
The exact costs you can claim depend on how you calculate your expenses.
For example, if you only use the car for business purposes, you might base your figures on actual expenses e.g. how much you actually spend on the vehicle per month. On the other hand, if you use your car for business and personal purposes, you might use the standard mileage rate method instead.
In both cases, though, you can put the costs of your business (not personal) car insurance through your company’s expenses.
Yes! In many cases, it’s possible to deduct all of your car insurance premiums from your taxes. There are some caveats, though.
Yes. However, you still need to use the car for business purposes to deduct the insurance from your taxes. As with other self-employed individuals, here are some examples of “business purposes”:
Your regular commute is not considered a business purpose. So, unless you use your car to perform job-related tasks, you can’t claim business expenses or tax deductions for the vehicle.
If your car insurance is tax-deductible, you can claim it one of two ways.
You will typically need evidence to support your claim for tax deductions. Track your mileage, keep receipts for relevant costs e.g. fuel and repair bills, and hold onto any other records which support your expenses claim.
How do you deduct your car insurance? It depends on if you’re self-employed or not.
If you’re unsure whether you can claim tax deductions – especially if you’re an employee rather than a business owner – seek legal advice first.
If you’re insuring a car through a business, don’t just take the first quote you find. Instead, shop around for the best deal for you. At InsurePro, we will match you with a range of competitive quotes and help you enroll quickly – so you can focus on running your business.
Looking for business car insurance? Get the best commercial auto insurance for your business now!