When it comes to car insurance, many business owners wonder: Is it cheaper to insure a vehicle through an LLC? The answer depends on how the vehicle is used, the type of coverage needed, and the insurer’s underwriting process. In this post, we’ll explore the pros and cons of putting car insurance under your business name and whether it could save you money.
✅ Benefits of Insuring a Car Through an LLC
1. Potential Cost Savings for Multiple Vehicles
If your LLC owns multiple vehicles, you may qualify for fleet insurance. Commercial auto policies often include volume discounts when insuring more than one vehicle, which can reduce your total premium.
2. Tax Deductions
While not a direct discount on your premium, commercial auto insurance is often tax-deductible. If the vehicle is used exclusively for business, you may be able to write off:
- Insurance premiums
- Fuel and maintenance costs
- Depreciation and mileage
Always consult with a tax professional for details specific to your business.
3. Asset Protection
Insuring your vehicle under the LLC helps separate personal and business liabilities. In the event of an accident, having the vehicle in your company’s name may protect your personal assets from legal claims.
⚠️ When LLC Insurance Could Cost More
1. Higher Coverage Requirements
Commercial auto policies usually require higher liability limits, especially if the vehicle is used to transport goods, clients, or employees. This added protection can result in a higher premium.
2. Business Use Is Considered Higher Risk
If the vehicle is driven more frequently or used for deliveries, site visits, or transporting tools, it’s considered a higher-risk use case than personal driving. This can increase your insurance rate.
3. Employee Driving Records Can Impact Rates
If employees drive the insured vehicle, their driving history can affect your premium. Even one high-risk driver on the policy could raise your overall cost.
📌 Key Considerations Before Switching
Before transferring a vehicle’s title and insurance to an LLC, ask yourself:
- Is the vehicle used primarily for business purposes?
- Do you need protection for your personal assets?
- Could your business benefit from tax deductions?
Every situation is unique. Some small business owners may save money; others may pay slightly more but gain additional legal protection and tax benefits.
💡 Work With a Trusted Insurance Agent
At Eugene C. Yates Insurance Agency, we’ve been helping Sacramento businesses navigate commercial auto insurance since 1946. Our team will:
- Compare personal vs. commercial policies
- Explore your eligibility for fleet or business discounts
- Ensure your business stays compliant and protected
Get a custom commercial auto quote today. We’ll help you determine whether insuring through your LLC is the right move—for your wallet and your peace of mind.
📞 Call us at (916) 313-6100 or get a quote online to start today.