Small Business Tips

How to use an OBD2 scanner for your business

MileIQ Team

If you’re like most people, you probably don’t know what an OBD2 scanner is. But if you use a car for work or manage a fleet of corporate vehicles, you may need to learn. An OBD2 scanner can help your business save time, money, and resources.

Read on to learn what an OBD2 scanner is—and how it can help your business.  

What is an OBD2 scanner?

An OBD2 scanner allows you or your mechanic to access vehicle data. The device is often small enough to fit in your hand. Once connected to your car, it can show you essential information, such as:

  • Your vehicle’s VIN number
  • You car’s speed, fuel efficiency, and engine RPM
  • Generic and manufacturer-specific diagnostic codes

This information can help you in multiple ways.  

For example, your car’s “Check Engine” light might turn on. With an OBD2 scanner, you won’t need to head straight to a mechanic. Simply plug in your scanner, find the diagnostic code and look up the code number. Then, you can decide whether you need to see a professional. Sometimes, the code will refer to a problem you can fix. In those cases, you can use the scanner to turn off the “Check Engine” light.  

Alternatively, you might see OBD2 scanners referred to as OBD-II scanners.  

How does an OBD2 scanner work?

Most modern cars contain software that produces on-board diagnostic (OBD) data. Cars have been using OBD data since the early 1980s.  

Vehicle owners can easily interpret current OBD data. Even if you don’t recognize diagnostic codes, you can rely on a search engine for help.  

OBD data is accessible through an OBD2 port. Usually, you can find the port located below the steering wheel. After connecting an OBD2 scanner to the port, you can access OBD data. You can also use an OBD2-compliant dongle to give a smartphone access to OBD data through Wi-Fi.  

Download MileIQ to start tracking your drives

Automatic, accurate mileage reports.

How can you use an OBD2 scanner for your business?

OBD2 scanners can be convenient for a small business. They are helpful if you use a personal car for work. They are also useful if you manage fleet vehicles.  

You might choose to deduct your personal car’s actual expenses. The IRS requires strict record-keeping to take that deduction. An OBD2 scanner provides detailed records that can help. For example, you can use an OBD2 scanner to track vehicle health. OBD data like RPM and fuel efficiency can help you measure depreciation. You can also use an OBD2 scanner to monitor fleet vehicle depreciation.  

You may want to use an OBD2 scanner because it offers an alternative to relying upon mechanics and saves time. An OBD2 scanner empowers you to check diagnostic codes. Having this handy tool means you don’t need to hire a professional each time the engine light flicks on. Reading diagnostic codes with an OBD2 scanner can save your business a lot of money in the long run.

OBD2 scanners can also provide accurate mileage readings. This information is critical for business owners who deduct mileage instead of actual expenses.  

What should I look for when choosing an OBD2 scanner?

When you start looking for an OBD2 scanner, consider how you’ll use it. Purchase a simple OBD2 scanner if you plan on using it to manage your “Check Engine” light. Buy an advanced OBD2 scanner if you plan on using it to measure car depreciation.  

The OBD2 scanner you choose should at least offer:

  • Fast data transfers
  • Compatibility with your car
  • Data storage capabilities

A more advanced OBD2 scanner should provide:

  • User-friendly dashboards and screens
  • Software upgrade capability
  • Wireless connectivity

What are some alternatives to an OBD2 scanner for mileage?

If you’re looking to track mileage for taxes, you have multiple options:  

  • Pen and paper: Record every single drive, mileage and business purpose. This method is very cheap to do but can be a pain to remember for every trip.
  • A spreadsheet: You can record your mileage in a spreadsheet like Excel. The digital version with cloud backup means you’ll never have to worry about losing your mileage log. You still have to input in mileage manually.
  • A mileage-tracking app: Apps like MileIQ can automatically track your mileage for taxes or business reasons.  

Download MileIQ to start tracking your drives

Automatic, accurate mileage reports.

Are you tracking your miles yet?

Use MileIQ to keep a full, IRS friendly mileage log.
Sign Up