Many contractors and employees use personal vehicles at least for part of their jobs. Some people rely on their personal vehicles for work, like delivery drivers bringing packages and food to consumers, or sales professionals using their cars to meet with clients.
While there are good reasons for using your own car to do your job, this practice also comes with drawbacks. Learn about the potential liabilities and benefits of choosing this option.
Benefits of Using a Personal Vehicle
There are several reasons why an employee or contractor would choose to use their own vehicle. First, many businesses don’t own company cars or a fleet of vehicles that employees can use. If you work for a small business, and you need to run an errand to do your job, your personal vehicle might be the only option available. Some companies also require team members to use their own cars and hire them because of their ability to provide transportation.
Here are a few additional benefits to consider when deciding whether or not using your personal vehicle is the best choice to get the job done.
Tax Deductions
If you use your car for business purposes, you can deduct the gas usage, maintenance, insurance, and wear and tear on your taxes. This can potentially help you save money on your tax bill at the end of the year.
The IRS provides two ways to track vehicle use and the cost of doing business. First, you can track the actual expenses related to your car, including your insurance bill and other maintenance costs. Add up your vehicle expenses and then estimate the percentage that you use your car for work.
The second option is to use the standard mileage rate. Track your mileage throughout the year whenever you are using your car for business — there are plenty of mileage tracker apps to help with this. Then, multiply your mileage by the set IRS rate to get your deduction. In 2024, the mileage rate is 67 cents per mile.
Tax deductions for using your own car can be valuable as long as your mileage reporting is accurate.
Flexibility and Control Over Transportation
Another benefit of using your car, instead of relying on an employer to provide one for you, is that you have full control over its availability. You do not need to worry about checking out a fleet vehicle, picking up the car at the office, and completing the return process. You can use your car just as you would for any other errand.
When you’re on the road, you have full control over the routes and the speed, as long as you’re traveling at a safe and reasonable pace. Some companies install GPS tracking into their fleet vehicles, which allows them to monitor the speed and path that employees take with company cars. If you travel frequently for business, you might enjoy the flexibility and control that come with using your own car.
Risks of Using a Personal Vehicle
There are significant drawbacks to using your car for business purposes. Cars wear down equally whether they are used for personal or professional reasons. You might need to increase your maintenance schedule because of this additional use. You are also potentially shortening the lifespan of your car because you’re using it more each day.
Learn about these risks to determine whether using your personal vehicle is worth it.
Increased Wear and Tear on Vehicle
Driving your vehicle for business purposes can wear it out faster. For example, tires are designed to last for 36,000 to 75,000 miles, or about six years. However, if you are driving throughout the day for business, your tires will wear out faster. Experts also recommend changing your oil every 5,000 to 7,500 miles. You may need to increase the frequency of your oil changes because of your increased vehicle use.
Car value is also usually based on the amount of mileage put on the vehicle. This means your car may depreciate faster because of the higher mileage rates.
Finally, the more your car is out on the road, the higher the risk of it getting damaged. A distracted driver could hit your car, causing dents and a broken bumper. Extreme weather like hail could leave a crack in your windshield. this would leave you with an unexpected windshield repair or when windshield replacement expense.
Insurance Requirements
If you regularly use your personal vehicle for business purposes, you might not be as covered on the road as you think. Many insurance policies do not protect drivers when they are using the car for business purposes. You may need to add an additional policy to your vehicle so you’re covered while working. While this insurance policy is a deductible expense, it is still another cost you need to budget for.
If your personal vehicle is damaged, you will need to take action quickly to repair it. For example, if a crack in your windshield is blocking your line of vision, you will need to have it replaced. Bringing your car to the shop for repairs means that you will lose both your personal vehicle and your work vehicle at the same time. This is inconvenient, but essential for keeping you and other drivers safe on the roads.
Liability Concerns
Adding business insurance to your personal vehicle can increase your liability coverage, which means you are less likely to pay out of pocket if you are at fault in an accident. However, liability extends beyond insurance costs. You will also have to take the lead in completing the car repairs and work through the accident claims with the other party involved. These both can be tedious and confusing processes. If you had a fleet vehicle from your company, your employer might take over this part of the job.
No one wants to think about getting into a car accident, but it’s an important risk to keep in mind whenever you get behind the wheel.
Tips for Protecting Your Personal Vehicle
While you cannot control the weather or the actions of other drivers, you can take steps to protect your vehicle and mitigate risk whenever you use your car for work. Follow these tips to make sure your car stays in good shape and you have the right coverage so you are protected in the event of an accident.
Regular Maintenance and Repairs
Keep your car running its best by following a dedicated maintenance schedule. Online checklists can help you learn when certain repairs need to be made so you stay on top of upkeep. For example, knowing when to replace your oil and check for enough coolant can keep your car efficient.
Not only should you focus on major maintenance requirements, but you should also keep up with day-to-day checks. Inspecting your tires to see if any of them are low and checking the air pressure can make sure they are filled correctly. This can prevent tire blowouts on the road while also maximizing your potential gas mileage. Something simple like air pressure can make a big difference in your gas costs.
Finally, don’t procrastinate on repairs. Not only is driving a poorly maintained car uncomfortable, but one issue could lead to another. For example, poor alignment could lead to a popped tire, driving up your overall repair costs.
Safe Driving Practices
You don’t need to be an expert mechanic to extend the life of your vehicle and ensure you have a safe trip. Develop a set of best practices to keep yourself and your passengers safe, including:
- Avoiding looking at your phone while you are behind the wheel and eliminate other distractions like eating.
- Listening to music at a safe volume so you can hear emergency vehicles.
- Always wearing your seatbelt.
- Learning to identify the signs of fatigue and rest when you’re getting tired. Drowsy driving is dangerous.
If you are uncomfortable driving, pull over — even if it means reaching your destination later than you expected. You shouldn’t continue to drive when you are tired, or if there is inclement weather like a storm or fog. Avoid pushing through dangerous road conditions because it is better to arrive safely.
Insurance Coverage
Shop around for insurance to make sure you get the best possible policy at a fair price. Quality auto insurance can help you save money in the event of an accident, while also giving you peace of mind.
If your car is damaged on the road, make sure you file a claim. It is better to have the claim on file and potentially receive coverage than to try and cover the costs out of pocket. Your insurance is meant to be used and has the potential to save you money.
You can choose whether or not you feel comfortable using your personal vehicle for business purposes. Regardless of how you use your car, be safe and make sure you’re covered.