The EIN or employer identification number can be used by businesses to apply for credit and loans relevant to the business. The loan or credit given will be approved or disapproved depending on your business’ credit rating and feasibility. Normally, the EIN is an easy way to get the credit you need. Some people get credit and purchase stuff using their EIN and this is a smart move because if something wrong happens, it cannot bite you in the butt. Purchasing a car with your EIN is another smart move because you can write it off as a business expense and get protection from personal liabilities. Use these tips for purchasing a car for your business. Here's how to buy a car with your business EIN.
- Get an EIN. For new businesses, you will need to get an EIN fast as you will need this for a lot of things. An EIN will be required when you file your corporate tax returns and for getting a line of credit or loan approved. It is required by banks to open a business bank account as well. Purchasing assets like cars, machinery, and property will require your EIN too. To get your new EIN, you can register and apply through the Internal Revenue Service or IRS. This can be done by visiting their offices or by applying online.
- Look for the right car. Once you have an EIN, you can now start to rummage a used car lot or a brand new car dealership. Check car buying guides to learn how to purchase a car. Select the car of your choice. Take note of the selling price of each brand. Do a quick comparison on brand performance and price. Make sure you check each brand out for the best possible choice. Remember you will be using this personally and for business. Choose the right car for your needs. Do not be swayed with cars that look great when function is your first priority.
- Negotiate the best deal. Anyone will tell you that the listed price can still be lowered through negotiation when buying a car. This is one of the most fundamental car buying tips. The listed price incorporates the maximum margin on the price of the car. Through further negotiation, you will find out the lowest price you can get it for. Make sure to negotiate other amenities and services such as free DMV registration, free rust proofing, and other warranties. Through good negotiation, you can get a lot of freebies. Once you have settled on a win-win price, inform the sales person that you want to purchase the car under your business name. The sales person will then ask for your EIN and perform a credit check if you will be opting for financing. For personal purchases, they will need your social security number instead.
- Register it under your business name. It is important to register the car under your business name and not your personal name after you purchase a car. If you register it under your personal name, the IRS will consider this a crime as it is illegal to purchase anything personal using your EIN. Make sure that the bill of sale, license tags and plates, and the purchase agreements list your business as the official owner of the car. Remember to make arrangements with the DMV if the vehicle you purchased is from a private seller. You will need to transfer the car registration to your business.
Having an EIN and knowing how to use it can benefit you both personally and in business. Hopefully, these tips on buying a car have showed you how simple the process is. Purchasing a car and even property is much more convenient if you do it under your business. You can still use these personally. The only thing is that you do not personally own it. Your business does.