To put a personal vehicle in your business’s name, you retitle it at your state motor vehicle agency so your LLC or corporation appears as the legal owner, after clearing any lien and deciding whether the business is buying the vehicle from you or receiving it as a capital contribution. The mechanics are straightforward, but the order matters: a lien has to be resolved before the DMV will process anything, the transfer structure you pick determines your tax basis and whether sales tax applies, and commercial insurance has to be in place the moment ownership changes.
Clear Any Loan Before You Do Anything Else
If you still owe money on the vehicle, the lender holds a security interest and appears on the title. You cannot transfer that title without addressing the lien, and most auto loan agreements restrict or prohibit transfers without the lender’s consent. Transferring anyway can trigger an acceleration clause that makes the entire remaining balance due immediately.
Three ways to handle it:
- Pay the loan off. Once the lender releases the lien, you get a clean title and can move forward.
- Get written lender approval to move the title to the business while the loan stays in your name. Some lenders will do this for a single-member LLC as long as you remain personally liable. Get it in writing before you visit the DMV.
- Refinance the loan in the business’s name if the company has enough credit history. The new lender then appears as the lienholder on the new title.
A DMV office that sees an unreleased lien will reject the application on the spot, so this step comes first.
Choose Between a Sale and a Capital Contribution
There are two standard ways to move a vehicle from your name to your company, and the choice shapes your bookkeeping, your tax basis, and whether sales tax applies.
Direct Sale
The business buys the vehicle from you at fair market value using company funds. The company writes you a check, records the payment, and books the vehicle as a fixed asset at the purchase price. This creates a clean paper trail and a clear cost basis on the company’s books. It requires the business to have the cash, and in most states the sale will trigger sales or use tax.
Capital Contribution
You contribute the vehicle to the business in exchange for equity or an increase in your ownership interest. No money changes hands. The vehicle’s fair market value is added to your capital account, and the business records the vehicle as an asset. This is common when funding a new LLC or building the company’s asset base without spending cash.
Contributing property to your own business entity is generally not a taxable event. For a partnership or multi-member LLC, Section 721 of the Internal Revenue Code provides that neither you nor the entity recognizes gain or loss on the contribution.1Office of the Law Revision Counsel. 26 U.S. Code 721 – Nonrecognition of Gain or Loss on Contribution The business then takes your adjusted basis in the vehicle as its own basis rather than fair market value.2Office of the Law Revision Counsel. 26 U.S. Code 723 – Basis of Property Contributed to Partnership For a corporation, Section 351 provides the same tax-free treatment as long as you control the corporation immediately after the transfer.3Office of the Law Revision Counsel. 26 U.S. Code 351 – Transfer to Corporation Controlled by Transferor
Understand the carryover. If you bought the car for $30,000 three years ago and it’s now worth $20,000, the business inherits your $30,000 adjusted basis (minus any depreciation you already claimed personally), not the $20,000 current value. That basis determines future depreciation and any gain or loss when the business eventually sells the vehicle.
Gather the Documents
Once you know how you’re structuring the transfer, pull together what the DMV will need:
- The original certificate of title, free of liens or accompanied by a written lienholder release.
- Business formation documents: Articles of Organization for an LLC or Articles of Incorporation for a corporation. The business name and address on every DMV form must match these documents exactly.
- The Employer Identification Number issued by the IRS, which identifies the business on tax-related forms and is typically required on the title application.4Internal Revenue Service. About Form 8822-B, Change of Address or Responsible Party – Business
- Your state’s title or transfer application. You sign the seller line as an individual, then sign the buyer line in your capacity as an officer or managing member of the company. Write your title (President, Managing Member) next to your signature so the DMV can see you have authority to act for the business.
- A bill of sale, even when no money changes hands. Most states require one. Include the VIN, odometer reading, transfer date, and agreed value.
Federal law also requires an odometer disclosure at title transfer. Under 49 CFR 580.5, the transferor records the mileage and signs the disclosure, and the document identifies the vehicle by make, model, year, body type, and VIN.5eCFR. 49 CFR 580.5 – Disclosure of Odometer Information The disclosure usually appears on the title itself, but some states use a separate form.
Set a Defensible Fair Market Value
Whether you sell the vehicle to the business or contribute it, you need a fair market value you can support. The IRS defines fair market value as the price at which property would change hands between a willing buyer and seller, neither being forced to act, both with reasonable knowledge of the facts.6Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses
The simplest source is Kelley Blue Book or a similar pricing guide, using the vehicle’s year, make, model, mileage, and condition. For a vehicle with unusual modifications or heavy wear, a written appraisal from an independent dealer or appraiser adds credibility. Document the method and keep it with your business records. A value set artificially high inflates your capital account and depreciation deductions and creates audit exposure. Setting it too low shortchanges your equity in the company.
File the Paperwork at the DMV
Bring the completed documents to your local DMV office, county clerk, or whatever agency handles title transfers in your state. Some states accept mailed applications, and a few offer online submission for straightforward transfers. Title transfer fees vary widely by state, with most falling somewhere between $15 and $200. Some states also base fees on the vehicle’s fuel efficiency or weight class, which can push the cost higher.
Sales and use tax is the bigger variable. If you structured the transfer as a sale, most states will charge sales or use tax on the purchase price. Rates run roughly 4% to over 9% depending on state and local jurisdiction, so on a $25,000 vehicle you could owe $1,000 to $2,250 at filing. Some states exempt transfers between an individual and a business entity the individual wholly owns, but the exemption is far from universal and many states specifically exclude motor vehicles. Check with your state’s department of revenue before assuming you qualify.
After the agency processes the paperwork, you’ll receive a new certificate of title listing the business as the registered owner. Two to six weeks by mail is typical. Keep copies of everything you submitted until the new title arrives.
Switch to Commercial Insurance the Same Day
A vehicle titled to a business needs a commercial auto policy. Personal auto policies exclude coverage for vehicles owned by a company, so your existing policy becomes effectively useless the moment the title changes. Driving uninsured even briefly during the transition exposes you to liability and to penalties in every state that mandates coverage.
Contact a commercial insurance carrier before you submit the title transfer so the new policy can take effect on the day ownership changes. Commercial policies typically carry higher liability limits than personal ones, which fits the fact that the business now bears responsibility for accidents involving the vehicle. If you plan to use the vehicle for personal errands, disclose that when the policy is written. Standard commercial policies don’t cover personal use unless the policy specifically includes it or you add an endorsement.
Update the registration as well. Some states require commercial plates for business-owned vehicles, and registration fees may differ from what you paid under personal registration.
What You Can Deduct Once the Business Owns It
Once the business owns the vehicle and uses it for business purposes, depreciation and related deductions open up. This is often the point of the transfer in the first place.
Section 179 lets you deduct the full purchase price of qualifying business property in the year it’s placed in service, rather than spreading the deduction over several years. Vehicles have their own sub-limits. SUVs rated between 6,000 and 14,000 pounds gross vehicle weight are capped at a $32,000 Section 179 deduction. Passenger cars and lighter vehicles face tighter restrictions under the luxury auto rules. Heavy work trucks and vans over 6,000 pounds with no passenger-oriented features can qualify for the full Section 179 amount without the SUV cap.
The One, Big, Beautiful Bill restored 100% bonus depreciation for qualifying property acquired after January 19, 2025, making it available again for 2026 and beyond.7Internal Revenue Service. Treasury, IRS Issue Guidance on the Additional First Year Depreciation Deduction Amended as Part of the One Big Beautiful Bill For passenger automobiles, bonus depreciation stacks with regular depreciation but remains subject to annual caps under Section 280F.
Those caps matter. For passenger vehicles placed in service in 2026, the first-year limit is $20,300 with bonus depreciation and $12,300 without, with lower ceilings in each following year. The figures come from Rev. Proc. 2026-15 and apply to cars, crossovers, and other vehicles under 6,000 pounds.8Internal Revenue Service. Rev. Proc. 2026-15 Transfer a $50,000 sedan to the business and you won’t deduct the full amount in year one; you work through it across several years within these ceilings. Heavier vehicles that qualify as trucks or non-passenger SUVs avoid the caps entirely, which is why the “over 6,000 pounds” threshold gets so much attention in tax planning.
If you contributed the vehicle rather than selling it, the business’s depreciable basis is your carryover basis, not current fair market value. A vehicle you bought for $40,000 and depreciated by $10,000 personally gives the business a starting basis of $30,000 for depreciation, even if the car is worth $25,000 today.
Keep the Liability Shield Intact
A major reason to title a vehicle in a business name is to separate personal assets from business liabilities. If someone is injured in an accident involving the company vehicle, the claim targets the business and its insurance rather than your personal savings and home. That protection only holds up if you actually treat the business as a separate entity.
Courts can pierce the corporate veil and hold you personally liable when they find the business is just your alter ego. With small businesses, this usually comes from commingling, meaning mixing personal and business finances so thoroughly that the legal separation stops meaning anything. Using the business vehicle exclusively for personal errands, paying personal expenses from the company account, or failing to keep basic formalities like an operating agreement all weaken the separation.
Practical habits that keep the shield in place:
- Log business versus personal miles. If you use the vehicle for both, keep a written or digital log showing the business purpose of each trip.
- Pay for gas, maintenance, insurance, and registration from the company account, not your personal one.
- Keep your operating agreement or bylaws current. If the LLC has multiple members, document the decision to acquire the vehicle in a resolution or meeting minutes.
- Carry adequate commercial insurance. A business with a vehicle and no commercial policy looks like an entity that exists only on paper.
Retitling the vehicle is the easy part. The discipline of keeping business and personal use genuinely separate is where most small business owners eventually slip, and it is what makes the difference between a liability shield that holds and one that collapses when you need it.