When Does a Personal Car Become a Commercial Vehicle?

When Does a Personal Car Become a Commercial Vehicle?

The border between personal and professional life can be blurry at times for small business entrepreneurs. When it comes to a vehicle that you’re using for personal and professional purposes, it’s crucial to understand how your auto insurer classifies commercial use. If your vehicle is insured under a personal auto insurance policy, the insurance company may refuse to pay for damages if it believes you were using the vehicle for business at the time of the accident.

For example, if you use your personal automobile for ridesharing, your insurance company may classify it as a business vehicle. Here’s how to determine when a personal car becomes a commercial vehicle.

What Is the Definition of “Business-Related Purposes”?

Your insurance company may classify your vehicle as a commercial vehicle if you use it to pick up or deliver goods, provide a fee-based service, travel to a distant work location or between work locations, or pay visits to clients. Other circumstances that may cause your car to be classified as a commercial vehicle include:

  • Other people rent or lease the car.
  • The vehicle is fitted with a snowplow.
  • The vehicle has an altered suspension system or other equipment or modifications.
  • You or your employees drive the vehicle for both commercial and personal purposes on a regular basis.

Can You Buy a Business Vehicle in Your Personal Name?

Even if you use your vehicle for business, you have the option of purchasing and registering it in your own name. Purchasing a business automobile in your own name is. To begin with, you can buy and register a company vehicle in your own name if it costs less than $10,000. Simply buy it, title it, register it, and insure it all in your name. You can also use either an ordinary personal license plate or a commercial license plate.

Advantages of Insuring a Business Vehicle in Your Personal Name

As it turns out, registering your vehicle in such a way has a few benefits. One of the most notable advantages of insuring a business vehicle in your personal name is that you’ll have to deal with fewer procedures. Plus, the process takes less time than insuring it in your business’s name. As a result, you’ll be able to get your vehicle on the road more quickly.

We hope you have found our article on when a personal car becomes a commercial vehicle informative. If you’re looking to insure your personal or business vehicle for work or for FR-44 insurance quotes, be sure to reach out to Serenity Group.