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How to Purchase a Car through Your Business

Steps for going about buying a car through your business

Every now and then businesses need access to a vehicle, and sometimes to serve its customers as well. Purchasing a car through your company name that will be in the service of employees is time-efficient and saves money, unlike having the employees drive their own cars. Buying a vehicle under a business name tends to last for a long time, but it will be stress-free if you follow some simple rules.

Man adjusting his neck collar by car (b/w photo)

Business’ credit rating

Paying bills on time, including the one of a credit card, regularly, ensures that the company’s credit rating is perfect. Getting a small loan and paying it off in monthly payments is the perfect start to buying a car through your business. Checking your business credit rating with reporting agencies is always a good idea. Review personal credit reports before you decide to apply for a loan. If you find some errors, make sure to correct them before applying for a loan, because lenders will check business and personal credit to make sure you are the good candidate for a loan.

Man standing by a vehicle (b/w photo)

A loan

First, you must prepare a loan proposal, with all the details including why your company needs a loan, what is the purpose of a vehicle you will buy, and of course, the information about your company’s work. The down payment amount and the amount of a loan should be stated in the loan proposal, as well as the marketing strategies and performances of your company, both past and current ones. Just in case, prepare business tax returns for the last two years, documentation that indicates how big a share of the business is in your property, business bank account statements for the previous three months, business tax identification number, and income and expense reports for the last year. These are some of the documentation that the loan lenders may require you to provide.

Man holding stearing wheel (b/w photo)

The list of lenders

Once you have decided how big of a loan you need, it is time to look for the potential lenders that will provide you with the money you need to purchase the vehicle. Searching for commercial lenders online is one of the options. If you have all the needs set down, you can list the lenders and see which of them is the most suitable for the loan. Going to the bank is a good start. However, commercial lenders are usually more open to granting this type of loan.

Woman sitting next to luxury car

Find a car dealership

Finding a dealership that finances and sells cars to business is essential. They have various benefits, such as offering special programs and maybe discounts for buying more than one vehicle. Make a list of dealerships that are nearby, but also offer a good price and quality vehicles and rate them in order to decide which one suits best your preferences. Furthermore, it is good idea to ask around at your colleagues and other companies to see at what dealership they purchased their vehicles. If you find out the dealerships are not as affordable to you, shop for a business vehicle at car auctions. They have numerous vehicles for you to buy, and sometimes they are less expensive than those at the dealership.

A luxury car

The final step

Once you have find the car you want to buy, all you need to do is finalize the price and deal with the paperwork. The vehicle needs to be registered to the company, and the name of the business should be stated in the paperwork.

Purchasing a car through a company, and with a loan nonetheless, can be complicated and time-consuming. Nevertheless, if the company’s credit is solid, you will not have the trouble getting a loan and providing your company with the necessary vehicle.

All above images courtesy of Creative Commons and Pixabay

Diana Smith - Google+

Author bio:

Diana Smith is a full time mom of two beautiful girls and a passionate writer. In her free time she enjoys writing about a variety of home and small business subjects, including marketing and promotion.

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