this is as much an issue of economics as much as taxes as long as the LLC is single-member.
person two may be taking excess deductions if that taxpayer is deducting 100% of car insurance because some cover the personal car which should be non-deductible. as for insurance talk to your insurance agent as to how to title and insure the car(s) since laws differ from state to state.
in either case, the IRS want records kept for mileage for the business car usage and expenses
say you buy 2 cars at $25K each 1 - 100% business 1 - 100% personal. say tax savings on the business car is 30%. so the taxpayer is out $42.5K ($50K - $7.5K) with just 1 car 50% business use the taxpayer is out almost the full $25K the first year because depreciation is limited when business use is 50% or less but over the taxable life of the car assuming the same 30% bracket $21.25k ($25K -$3.75K). 179 can't be used if business use is 50% or less.
nothing prevents the 2-car person from using a more expensive vehicle for business and a cheaper one for personal or vice versa. as I said this is as much economics as taxes.
Then you can write off all gas and maintenance and toll/parking expenses in the following years. not totally correct since in addition to depreciation you can write off the business expenses - gas, repairs tolls parking insurance in year 1.
record-keeping for two cars can be time-consuming. you need to keep track of the expenses attributable to the business car - such as gas, repairs, tolls, parking, etc. with1 car expenses are allocated based on mileage except you can use specific accounting for tolls and parking (receipts if possible with the business reason or property you inspecting)
