How to buy a car in your company name in South Africa

You can buy a car in your company name, and for a lot of businesses you should: the asset sits on the company's books, the costs run through the business, and there's no argument later about whose bakkie it really is. But the process has a step almost nobody warns you about, and two different arms of government own it. The traffic department (under the Department of Transport) controls who may own a vehicle on eNaTIS, the national vehicle register. SARS controls what the purchase means for your tax. This post walks through both.

Govchain handles the company side of the paperwork, from registering the Pty Ltd to retrieving the CIPC documents the bank and the traffic department will ask for.

What you need before you start

A registered company. A Pty Ltd or a CC. A sole proprietorship won't work here, because the business isn't a separate legal person; the car would just be registered to you.
A BRNC, the step nobody warns you about. eNaTIS identifies vehicle owners by ID number, and a company doesn't have one. Before it can own a vehicle, the company needs a Business Register Number Certificate from your local traffic department. We've written a full guide: how to get a BRNC certificate, including the official ABR form and the letter templates the counter asks for. If you're buying from a dealer, sort the BRNC out first; the dealership can't register the vehicle without it.
Your CIPC paperwork. The CoR 14.3 registration certificate and proof of the company's tax number come up at the bank, at the traffic department, and at the dealership.
A business bank account, since the instalments or the purchase price must come from the company. Govchain can help you open a business bank account if you haven't yet.
The money, or a finance plan. More on this below, because financing a young company is where most first attempts stall.

Step-by-step: putting a car in the company's name

Decide whether the company should own it. Company ownership makes sense when the vehicle genuinely works for the business. If it's mostly your personal car, private use gets taxed as a fringe benefit anyway (see the tax section), and personal ownership with a logbook for business travel is often simpler.
Get the company documents together. CIPC certificate, tax number, company bank statements. If you can't find your documents, a free company search on Govchain pulls your company's records and compliance status.
Get the BRNC from the traffic department. In person, with the ABR form and supporting documents. Budget a counter visit and, at some offices, up to three weeks of processing. One BRNC covers every vehicle the company will ever own, so this is a once-off.
Arrange payment or finance in the company's name. The major banks' vehicle-finance arms all offer instalment sale agreements to companies. For a company with no trading history, expect them to ask for a deposit and for the directors to sign personal suretyship, which means you're still personally on the hook if the company defaults. Bring the CIPC documents, company bank statements, and often a Tax Clearance PIN.
Insure it in the company's name. The policyholder must match the registered owner. A company car on your personal policy is a claim waiting to be rejected. Tell the insurer honestly how the vehicle is used (business-use cover costs more than private-use cover, and the wrong class is another repudiation risk), and note that the premiums become a deductible business expense.
Register the vehicle on eNaTIS. The dealer usually handles this once you hand over the BRNC and the company proxy's details. Buying privately, you do the change of ownership at the traffic department yourself, exactly as gov.za describes for registering a motor vehicle, with the company as the new owner. Licence renewal then lands in the company's name every year.

Can the company claim the VAT back?

Here's the rule that surprises people, and it turns on what you buy. The VAT Act blocks input tax claims on a "motor car", which it defines roughly as a vehicle built mainly to carry passengers. A sedan, a hatchback, an SUV, and yes, a double-cab bakkie all count as motor cars. A single-cab bakkie, a panel van, or a truck doesn't.

So a VAT-registered plumbing company that buys a single-cab bakkie for the tools can claim the VAT back. The same company buying a double-cab for the same job can't, even though both are work vehicles bought by the same VAT vendor. The full rules sit on SARS's VAT pages, and this one is worth reading before you choose the cab configuration, because on a R400,000 double-cab the blocked claim is over R50,000.

If the company isn't VAT registered, none of this applies; there's nothing to claim either way. Registration only becomes compulsory at R2.3 million of taxable turnover in a rolling 12 months, though you can register voluntarily from R120,000.

Beyond VAT, ownership brings the ordinary business deductions: the company writes the vehicle off over time as a wear-and-tear allowance, and deducts finance interest, fuel, insurance and maintenance to the extent the vehicle is used for the business.

The fringe benefit, if you also drive it home

If a director or employee uses the company car privately, SARS treats that as pay. The company must add a percentage of the vehicle's determined value to that person's monthly remuneration as a fringe benefit, currently 3.5% per month (3.25% if the car came with a maintenance plan), and tax it through PAYE. Keeping a logbook of business kilometres reduces the final bite at assessment time.

These percentages and the write-off periods do shift with tax legislation from time to time, so confirm the current figures with SARS or your payroll software before you run the first payslip that includes the car.

A worked example

A VAT-registered construction company buys a new single-cab bakkie for R402,500 including VAT, financed over 60 months with a 10% deposit.

Input VAT claim: R52,500 back from SARS on the next VAT return, because a single-cab isn't a "motor car". Effective cost drops to R350,000.
Wear-and-tear: the R350,000 written off over the vehicle's write-off period, reducing taxable profit each year.
Deductible running costs: finance interest, fuel, insurance, tyres, services, licence fees.
If the owner also drives it privately: roughly R12,250 per month added to their payslip as a fringe benefit (3.5% of R350,000), taxed at their marginal rate.

Construction firms are the single biggest group on our platform, about one in five of the companies we work with, and this exact bakkie maths is one of the questions that comes up most once they start winning contracts. The double-cab version of the same purchase loses the R52,500 VAT claim on line one, which is usually the deciding fact.

Where buyers get stuck

Buying before the BRNC exists. The deal is signed, the finance is approved, and then the dealership asks for a certificate you've never heard of. Registration waits until the traffic department issues it.
Assuming the double-cab claim. The "it's a work vehicle" argument doesn't override the motor-car definition. SARS disallows the input VAT and adds penalties if you claimed it.
Financing in a personal name "just for now" and paying from the company account. The deduction trail gets messy, the asset isn't the company's, and fixing ownership later means a formal change of ownership plus bank consent.
Forgetting the fringe benefit entirely. It surfaces in a PAYE audit years later, with the tax, penalties and interest all landing at once.

FAQ

Can I transfer my personal car into my company?

Yes. The company needs its BRNC first, then you do a change of ownership at the traffic department, the same process as any private sale. If the car is financed, the bank must consent (usually by settling or moving the finance). Treat it as a sale at a realistic market value, since you and your company are connected persons in SARS's eyes.

Does the company need a new BRNC for each vehicle?

No. One BRNC covers every vehicle the company ever registers.

Can a new company with no trading history get vehicle finance?

Usually yes, but not on the company's strength alone. Banks lean on the directors: expect personal suretyship, a deposit, and sometimes six months of company bank statements. A transport business buying its first truck faces exactly this, which is why many start by sub-contracting before buying.

Put the company paperwork behind you first

Everything above assumes the company side is already in order: registered, tax number issued, documents in hand. If that's the part still outstanding, Govchain registers your Pty Ltd with the SARS tax number included, and keeps the CIPC documents the bank and the traffic department will ask for one click away.