how to lease my vehicle to my llc [Guide]

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Last updated : Aug 14, 2022
Written by : Bernadine Maben
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how to lease my vehicle to my llc

Comment by Edyth Osen

how do you lease a car in the name of your business well there's a correct way to do it and a wrong way what are the steps what about insurance and what about a car you already own but want to move that car and use that car for your business when you lease a car in the name of your business that car becomes a business asset allowing you to deduct the cost associated with the car oh and what costs well you have two options the first method is something called the actual expense method which as the name implies allows you to write off the exact cost of the vehicle so the actual lease payments sales tax any repairs your maintenance costs and even those annoying trips to pet boys are all tax deductible oh and let's not forget about insurance payments now the second option that you have for writing off a leased vehicle is with something called the standard mileage method which simply allows you to write off mileage but no matter which option you choose i want you to know these three things first you can choose only one method to write off a leased vehicle so calculate both methods during tax time to see which one allows you the biggest tax write-off and the second thing is that you can only deduct the portion of expenses or mileage used for your business so if you use the car 20 of the time for your business then you can write off 20 of expenses or mileage during tax time so now you know the benefits of leasing a vehicle let's look at how to actually get the lease for that vehicle step by step and that process is actually pretty simple step number one to leasing a vehicle in your business name is to build your business credit and that's because a business who has established business credit will be able to lease a vehicle in the business name get this without a personal guarantee and on the flip side a business that does not have established business credit will still be able to put the lease in the name of the business but will more than likely have to sign a personal guarantee which simply means that you are personally liable for any defaults on those payments now if you just got discouraged don't be because here's the truth most people will not have enough business credit or even a big enough business to bypass a personal guarantee and if that's you it's completely okay here's a tip i wish i knew when i got started in my business when you go to lease that vehicle simply ask that they do not report on your personal credit unless you default on payments you'd be surprised how often they'll accept that request especially if you have some sort of history with that dealership but how exactly do you build your business credit i made an entire video on this exact subject but for this video here's the quick and to the point version of how to build your business credit step number one is easy and something you likely have already done and step number one is to incorporate the business you see as a sole proprietor or general partnership you don't have separation between you and your business in the eyes of the irs you and your business are one in the same and because of this it's nearly impossible for a sole proprietor or a general partnership to build business credit so step number two is to get an ein and ein acts like the social security number for your business and some businesses require an ein from their vendors in order to pay them for services and don't worry about costs because you can get an ein completely free simply by visiting the irs's website now once you have an ein you're ready for the next step and step number three is to get a business phone number and a business bank account and you will use that business bank account to receive all revenue and to pay all expenses now step number four is to register with done in bradstreet and get yourself a duns number now step number five to build business credit is to establish trade lines specifically with vendors who report to your business credit and trade lines are simply lines of credit where certain vendors and certain suppliers will allow you to buy products today and pay for it at a later time and those payments that you make report on your business credit to get you started here are three very popular and useful trade lines the first is shirtsy which is an online store to buy customized apparel for your business then there's uline which is one of the top sites for packaging materials and supplies and then there's quill which supplies office and cleaning supplies for your business so you have your trade lines now simply pay them on time do this enough and your business credit will grow and to get the highest credit scores pay your trade lines early all right step number two to getting a lease in the name of your business is to go out and get the lease in most cases dealerships will have a specific department that is dedicated to loans and leases for business owners you'll want to talk specifically with that department now before you sign any old lease agreement here's a few important things that you should know about leases first know that there are two types of leases that you can get in an open in lease contract you are responsible for paying any difference between the estimated residual value which is basically the estimated resale value and the actual resale value at the end of the lease in a closed-end lease you are only responsible for paying the extra mileage and damages that are not considered normal wear and tear so if you plan to put a lot of miles on your leased vehicle and open lease may be best for you because the difference in value is often cheaper than paying for extra mileage then there are a few terms that you want to be aware of so you can get the best deal possible like capitalized costs aka cap costs which is the amount you pay to lease a car and when you negotiate make sure that that is a lot lower than the msrp then there's residual value which is the amount the car will be worth at the end of the lease and it's important to know that that residual value is based on a number of factors including what type of car you have and how long the lease actually is because the longer you keep the car the less its residual value will be because the car depreciates over time and speaking of time let's talk about term length term length is simply the number of months you lease the vehicle for shorter term leases tend to be more expensive than longer term leases because the value of the car depreciates the most especially in the first two years with longer leases generally having lower monthly payments but always think about the needs of your business first because breaking a lease early does come with extra penalties then there's something called estimated annual mileage and it's something that you want to know before you sign your lease your estimated mileage will be determined by how often you drive the vehicle per year before you have to come out your pocket to pay for extra mileage if you plan on driving more than the average person which is about 12 000 miles per year then you may want to consider an open in lease and now that you know those terms you can better neg

Thanks for your comment Edyth Osen, have a nice day.
- Bernadine Maben, Staff Member

Comment by Yetta

when you transfer your personal asset to your llc you're also transferring the loans that are attached to that personal asset you're trying to get into real estate with minimal risk this is how you do it go to your board assessor's website through your county and look at all of the property owners that have not everyone welcome back to my channel thank you guys so much for coming back if you don't know who i am i am financial bae here on this channel i like to talk about financial literacy but what separates my channel from any other content creator is i like to talk about financial literacy through my own lived experiences the topics that i like to talk about is forex bitcoin credit home ownership and tax lien certificates and anything in between if that is something that interests you make sure that you leave a comment subscribe like and share my content because that puts my face into the algorithm today we are going to be talking about how to transfer your personal assets to your llc i dropped this reel on instagram if you're not following me on instagram make sure that you follow me but i dropped this surreal on instagram and i got so many inquiries about how to transfer your personal assets to your llc and i would love to show you guys how to do that so let's go ahead and talk about the steps and then we're going to talk about the benefits of transferring your assets to your llc so step number one you want to obtain the ownership documents for the asset so the ownership documents for your personal assets if you want to transfer a house to your llc is going to be a deed if you want to transfer your personal asset that's a car it's going to be a title so your ownership documents is a deed or a title depending on what personal asset you want to use your deed is what transfers ownership from one individual to the next and your title is what transfers ownership from one individual to the next or one individual to the llc it just is a transfer document so step number two you want to contact the agency that the deed or title was filed with so again if you have a house the agency that you filed your deed with will be your county courthouse if you have a car the agency that you filed your title with is going to be the dmv these are both state-ran institutions and that is why you are going to go to them because they are the ones who put your property out there or they put your car on the road does that make sense perfect you're also going to obtain a deed or transfer title form from these places step number three contact any mortgage lender or leasing company who has a lien against your asset so basically whoever gave you out the loan to finance your house or your car you are going to contact them and ask them for permission to transfer your your personal assets to your llc now let me go a little bit more into detail about this because step number three is what will trip a lot of you guys up if you just applied for your llc and you're trying to transfer your personal asset like your house or your car to your llc it might not work and this is why your lender might require for your llc to meet the loan requirements so the same way that you got approved for your car or your house your llc needs to have those same credentials so what that means is you need to build the credit portfolio of your llc but what's good about that is it's not going to take that long to build it takes about 90 days to establish your credit portfolio and you can get your duns number from duns and bradstreet so that takes about 90 days i go into detail um in another video on how to build your llc credit portfolio using vendor accounts so i won't really go into too much detail on this video but that is pretty much how you're going to do it establish credit credit history or a credit portfolio for your llc and then you can make the transfer so that takes up to 90 days step number four you are going to fill the transfer form out completely stating the new owner as the llc you need to make sure that you spell your name your llc name you need to make sure that you spell that correctly just to avoid any type of confusion you do not want anyone to be confused about who the owner is of that so however your llc name was spelled when you filed it please spell it the same exact way number five take the document to the notary and have it notarized so basically you are going to get the document stamp the title form the title transfer form you are going to get that stamped and you can get it stamped at either fedex usps or your bank when they stamp it the person that works there that's helping you is going to sign off on it to actually record that this transaction is happening that's pretty much all a notarization is all right now step number six this is the last step you are going to submit that transfer paperwork to the jurisdiction recording the ownership so you are going to submit that transfer form to either your court county courthouse or your dmv once you do that a new title or deed will be sent once the paperwork is processed and the transfer is complete okay so i hope all of that made sense i broke that down really good and i also will leave a link in the description on a really amazing article that i got all of my information from that will go into more detail if you need more help if you need more help about that that section on the steps leave a comment and i will be more than happy to respond back to you now let's talk about the benefits and why i personally think it's important to transfer your personal assets to your llc reason number one um the reason why i think you should transfer your personal assets to your llc is because suppose you do something you make an accident and somebody tries to sue you remember guys we do live in america if you breathe on somebody they will try to sue you if you look at somebody wrong they will try to sue you so one way to protect your personal assets is by having it in your llc if they try to sue you the individual they can sue you but they cannot touch your personal assets you know why because your personal assets is attached to your llc and your llc is an a separate individual it's a separate entity it has its own social security which is the ein number it has its own identity so no one can touch your personal assets i'm not saying that it's not possible for them to sue your llc but it's going to make it a little bit more difficult for them to touch your personal assets all right so another reason reason number two why i think you should transfer your personal assets into your llc so when you transfer your personal asset to your llc you're also transferring the loans that are attached to that personal asset whether it's a car note or a home loan that will go directly into your llc now the reason why this is good is because a lot of you guys have student debt i know that that is a thing that hinders a lot of people so suppose you want to apply for a new home loan or you want to purchase a house or you want to start a business and you want to get more funding or some type of funds for your project the bank whoever is giving out that

Thanks Yetta your participation is very much appreciated
- Bernadine Maben

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