Can you help with purchasing a Tesla as a business vehicle?

[xilex]

Hi all, I need some help with doing things properly for purchasing a Tesla for use as a business vehicle (*not* leasing). I'm a one-person S-corp and will not be transporting people/equipment, but instead is used for travel from office to hospital(s). What is the correct way to set up car registration, financing, and auto insurance?

It sounds like to be able to depreciate the car as a business asset, on the Tesla account page, I have to choose Registration Type as a Company, is this correct? As a result, however, it says the credit application will be submitted on behalf of the business. If I probe some of the local credit unions to see if there is a better rate, can I submit an application on my name instead of the business?

And lastly, regarding auto insurance, can you add a business as a second driver? I spoke with one insurance company and I said the car is going to be used for business purposes as stated above and they said that should be okay. What have other owners done in this situation? Thanks.

 

[La Piazza]

I did the same in April- also S Corp. It is registred to the business & myself. It has become a business deduction. I Can't help you about financing. But insurance has cost me more...$807 (model 3) with State Farm per 6 months. I am not happy However I just got great rates with Costco insurance- $707 for 3 vehicles / 6mo.( 2nd personal Model 3 + 2 much older ICE cars with one 18year old driver)- save thousands. But I found out the Costco insurance (Ameriprise) will not insure business vehicles -which I think is funny because Costco members comprise of a ton of small businesses...
That is a good idea about the business being a second driver. I'm going to look into that!

 

[xilex]

Thanks for the reply. Can I ask what you chose for Registration Type-Company or two persons?

And what did you do for insurance? It wasn't clear from your post if you put it under your name or the business name. Are you insuring only the Tesla with State Farm with commercial auto?

 

[Uncle Paul]

If you are looking into a Tesla for your business, be sure to consider the Section 179 SUV benefits that would be available with the Model X.

You could use accelerated depreciation to deduct the entire cost of the vehicle the first year.

As a S Corp the tax benefits would flow to the owner, even if it is not registered to the Corporation.

If you own the Corp and also own the car, the benefits flow.

Gotta check with your Tax Advisor, as everybodys Taxes are different, but it really throws off some huge tax benefits by purchasing a SUV with a Gross Vehicle Weight of over 6,000 lbs. (The Model X qualifies)

Section 179 benefits change every year. If you take delivery, and place the X into service by the end of this year you get the entire deduction. Some place the vehicle into service near the end of the year and use it exclusively for business use. That way you could take the maximum 100% deduction. Still need to use the vehicle at least 50% in following years to maintain the deduction.

These deductions only work for the Model X. For people that qualify it makes the X much less net cost than either the 3 or S.

 

[jdrizzo89]

Let’s say theoretical you make $10k from your part time business and $90k from your full time job. Could the X be written off to offset your total liability ($100k) or just the $10k from the part time business?

 

[Edtreo]

How about deducting electric bill for charging at home?

 

[Uncle Paul]

Only can deduct that portion where the car is used for the business. If it is only used 10% for business, then you can only deduct 10%.

They frown on people that will set up a side gig and try to use that to game the deduction.

 

[Naekuh]

easier to write off on business for a X then a S.
I think the Gross Weight and the class as being a SUV has something to do with it.