Buying a vehicle for business

So im new to operating an incorporation as a sub contractor. I havent made any money yet, in fact technically the business is in debt, because I've mostly been buying supplies and driving back and forth between here and red deer setting everything up(using my personal account right now)

Now, because I'll be driving who knows how much, between home and red deer, ive decided to get a different commuter and sell my civic.

What is the best way of buying the new vehicle through my business(write off purposes) without actually having money in my business account yet. Loan from my personal account?

I'm new to all of this, so its completely foreign to me. Thanks boys.

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Originally Posted by 03ozwhip

What is the best way of buying the new vehicle through my business(write off purposes) without actually having money in my business account yet. Loan from my personal account?

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I think that's the only way. You won't be able to get credit to buy anything and you don't have any actual income to spend. When I tried to do it I couldn't even get a loan from Dodge without at least three months of actual real revenue, and they'll finance anybody.

I don't know what your situation is but if I was you I'd take a real hard look at whether or not it's worth it to have the vehicle in the company's name. Yeah you can write off a bunch of shit, but it's a lot less fucking around to just pay yourself the 52 cents per kilometer or whatever it is.

Do you have another vehicle? You'd still need a personal vehicle and then a corporate vehicle. Otherwise I just keep my vehicle personal and then expense mileage to my company, if you drive enough it actually ends up paying the vehicle off which is great. Note that you can't bill mileage from your home to your permenant office/workplace though (different if its a worksite that changes).

Pay yourself the $/km for legit business mileage. That is MUCH simpler.

Ya im not sure what all of the benefits of it is, but thought it might just be better that I did it through my company. So just buy personally and charge my company for mileage?

That's my strong recommendation.

I would buy the vehicle personally and then charge out to the corporation, if you have any intent of using this vehicle for personal use this is the easiest way otherwise it gets messy. Are you buying or leasing? With my corporation and current vehicle I just charge it the % of my lease/fuel/maintenance that I use for business. The CRA has a formula for that every year, this works out slightly better than charging mileage depending on the cost of the vehicle, if it's a shitbox I would do mileage. Mileage rates are determined by the CRA and I believe is $0.59/km for the first 5000 and then $0.53 after that. Lease % makes sense if you are buying a nicer vehicle.

I bought my truck personally and used company funds for the payment.

Logged mileage every month and provided it to my accountant for the corporate year end.

It won't be an expensive vehicle, basically a commuter that may get used once in a while personally.

Op:
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edit for relevant advice: if you are expensing km, keep a very detailed mileage log. I know someone who got audited for this and despite having a great mileage log, he said it was still a pain in the dick.

I'll add my vote in on buying it personally and paying KM. I went through this exercise with my accountant when I started my company and it almost any scenario we could come up with it was more advantageous to buy it personally. It also reduced the attention the CRA would give you potentially leading to an audit.

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Originally Posted by 03ozwhip

It won't be an expensive vehicle, basically a commuter that may get used once in a while personally.

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Do what everyone said. Unless you can prove that you didn't and can't use that vehicle personally (ie, not even down a block to buy a pack of smoke), logged your kms.

Once your company is large enough that it's making big profits beyond expenses, then get your accountant to advise you on the next vehicle. Until then, buy and drive an economical personal vehicle and expense the KM.

K thanks guys