If you've been following my "buying advice for a 2010/2011 HHR" thread, you might know by now that, after a huge fiasco, we're now the owners of a fully-loaded 2009 2LT with 20k miles. I think the only things it's missing are the rear cargo mat and the rear spoiler.

Now we just have to figure out whether to title the car in our names or under our LLC since it's going to be used for our business. Are there any other business owners here?

1. How did you title your business car (HHR or other)?
2. What are the pros and cons of each option?
3. In practical terms, what are the liability and tax implications?
4. What's going to cost me the least money (or save me the most), and what tradeoffs will I be making?

Thanks!

 

Funny thing is, what will your home state title it as? Some folks on here have HHR's titled as cars: some as Suv's, some as trucks, and so on.
Seems like each state as their own idea of what kind of vehicle it is.
My state, Alabama:it's a truck.

 

Yeh, in N.C. my HHR Panel is titled as a van.
I would think it would be better to put it in your business name so all payments, repairs, and maintenance becomes a tax deduction. But what do I know!

 

It doesn't matter to me how the vehicle type is classified--I've seen either truck or van listed on various documents so far.

Regardless of ownership, my understanding is that we can either deduct $0.55/mile for business expenses; or we can deduct actual expenses--including depreciation, maintenance, fuel, and I would hope insurance. The difference is whether we pay up front using the company credit card (if it's titled under the LLC), or if we pay from our personal credit cards and get reimbursed later (if it's titled under us personally). The advantage of the former option is that we wouldn't have to keep meticulous records of the expenditures, although I'm sure we could just dedicate a single personal credit card to pay most of the expenses and make them easier to track.

The main ownership implication I can think of is that, if the HHR is titled to the LLC now, then we chose to make it our personal vehicle later, we have to sell it for market value at that time (basically, what we paid minus depreciation) and pay the 5% registration fee as mandated by the state to transfer the title. That might be $250+ if we use the HHR as a business vehicle for 5-7 years. If we title it to ourselves now, then stop using it as a business vehicle in the future, we obviously don't have to pay to transfer the title.

But on the other hand, I'm also curious about any insurance implications. If the HHR gets in a wreck, is it better to have it titled and/or insured under the LLC vs. under us personally? If it's in a wreck while being used for business, and it's insured under the LLC, does that shield us from being personally sued? Does it protect our personal auto insurance from rate increases?

Those are just a few of the issues I can think of; I'm sure there are others.

 

I think the advice you seek should come from a CPA.

 

Thanks...our accountant is talking to a CPA for the tax side, and I've also contacted SCORE for pointers on the legal side, but was hoping there might be someone here who has some practical experience they could share ("Do this!" or "Don't do that!"), given that the HHR is very commonly used as a business vehicle. Talking to insurance agents, I've been getting some mixed messages.

I've thought about contacting some of the businesses in my town that have HHRs wrapped with their advertising, but the ones I can think of all use the car almost exclusively as a delivery vehicle that's constantly on the road--which I think would be more expensive to insure than one that's used for errands maybe a couple times a day and for deliveries at most a couple times a week.

 

I have an s-corporation that is sub contracted with a courier company. I do my deliveries in the HHR which is titled in my name. I drive enough miles every year to make it worth while for me to use the mileage deduction and I don't have to keep up with all the maintenance and depreciation. Even though it is in my name, it is insured as being used for my delivery business. I believe my personal assets are protected if I were to be have a bad wreck and be sued. This is how my CPA set things up for me.