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Bottom Line Up Front

  • Some businesses would benefit from having a business-specific vehicle on hand, particularly if the business requires driving frequently.
  • Business vehicles can have numerous benefits, including tax deductions and more favorable insurance rates.
  • Business owners should think carefully about the expected mileage, space requirements and other factors when choosing a vehicle.

Time to Read

5 minutes

July 21, 2022

If you’re self-employed or own a small company, buying 1 or more business vehicles may be a smart financial move. For some businesses, this is a no-brainer. For example, if you own a drywall business, the vehicle you use for transporting supplies and equipment is a key part of your job. But even if you’re a self-employed consultant, you need to drive to meet with clients or attend meetings. 

If driving is part of your business, then a business vehicle is something to consider. Here are the basics of buying, financing and insuring a business vehicle. 

When should you buy a business vehicle? 

You may be able to use your current car or truck for business needs and avoid the expense of a new vehicle. Using your personal vehicle for business purposes can be very beneficial when tax season rolls around. Mileage, maintenance costs, parking tolls and car loan payments are all tax-deductible expenses that can save you and your business money. 

However, there are also tax advantages to purchasing a vehicle specifically for business use. It’s important to research the tax implications of claiming vehicles for small businesses before you make your decision, and always be sure to discuss with a professional tax advisor. 

There are other benefits of having a business vehicle that aren’t tax related. You can insure your vehicles through your business, protecting your personal insurance from going up by adding another driver. 

And don’t forget—depending on your business, the vehicle you use can influence your customers’ perception of you. 

For example:

  • If you’re a consultant for green building projects, pulling up to the worksite in a fuel-efficient hybrid car reinforces the public’s perception of your commitment to the environment.
  • If you’re a roofing contractor, your parked vehicles are billboards showcasing your work while you’re on location. 
  • If you regularly transport clients as a part of your business, your vehicle is like a second office and should make a good impression.

What kind of vehicle do you need? 

When purchasing a vehicle for your business, the first consideration should be how you plan to use it. Think about how often you’ll drive the vehicle, the total mileage you think you’ll use, what terrain or types of weather it will encounter and how many people will need to ride in the vehicle on a regular basis. 

Consider purchasing potential vehicles like a panel van, delivery truck, pickup truck, car, van or even an RV. Remember that vehicles like forklifts and dump trucks aren’t considered business vehicles—they’re equipment. There may be tax implications associated with some vehicle types, including special depreciation allowances for certain pickup trucks and vans or tax breaks for electric vehicles. It’s a good idea to talk to your tax advisor before you make a purchase. 

Considerations for Buying a Business Vehicle 

Finally, you’ll want to decide whether you should buy a new or used vehicle. Again, you’ll need to consider how you plan to use it. Some large trucks and vans can be very costly to buy new, so a used vehicle may be an attractive option. However, there may be dealer incentives or warranties associated with new vehicles, so think about that as well. If you do choose to buy used, take the same steps you would when buying a used vehicle for personal use.

When you’re ready to start shopping, look for manufacturer’s incentives, especially for business buyers, such as cash back, rebates or fleet discounts. While incentives can provide great deals, make sure you aren’t swayed from choosing a vehicle that’s right for your business purpose. 

Before you go to the dealer, secure your financing, making sure to work with a financial institution that provides loans especially for businesses. Navy Federal Credit Union offers both business and commercial vehicle loans for small-business clients. And, when you’re approved for a used business vehicle loan through Navy Federal, we’ll review the CARFAX® Vehicle History ReportTM so you can buy with confidence.

It’s also important to protect your investment with the right insurance. Personal policies don’t have the same protections offered by business policies, so it’s best to insure business vehicles separately. You can also protect your personal insurance rates by keeping these accounts separate. There are 3 types of policies that cover most vehicle usage: business use by you, business use for multiple drivers and commercial traveling policies. Talk to your insurance advisor about which coverage is right for you. 

Get Moving for Your Business

The main things to remember are to prioritize the right kind of vehicle for your purpose and to talk to your tax and insurance partners throughout the process. And, when you’re ready, keep your business moving with a business or commercial loan from Navy Federal

Next Steps Next Steps

  1. Think carefully about whether your business requires vehicle use and whether a personal or business-specific vehicle is the right choice. Consider how often you’ll use it, your budget and tax implications. 
  2. Begin researching potential business vehicle options. Keep in mind the expected mileage, terrain, weather and space requirements when ruling out options. 
  3. Turn to Navy Federal to apply for a business or commercial vehicle loan. Getting preapproved will ensure you stick to your budget when shopping!


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.