It occurred to me this part was not clearly stated in this topic:

A person does not get the use of a car for free. Even though the LLC is paying something to "someone" for "something" in addition to operating costs, they are either buying the car from the C Corp (a sort of wrap-around purchase as installment sale) or the LLC (your individual person, if there are no partners) owns the car and the C Corp does not own it. The C Corp is more like his parents co-signing on the loan.

If the C Corp owns a car it isn't using, the asset is not in service. If there never was the intent for the C Corp to have a business use of this vehicle, it's going to be very hard to show depreciation on something that is not just parked when not in use by the owner (C Corp); it has some use and that would need to be represented properly. Here is the typical method of: a business has a fleet of Delivery vans, and when not in use, they are parked. If an employee wants to take it camping for the weekend, that is personal benefit. The IRS doesn't allow freebies.

If there is any personal use of a vehicle by an employee, that is Taxable as a fringe benefit to the person using the vehicle. Even if the LLC bought a vehicle and then let an employee use it, that is taxable to the employee. Example: No one gets the use of the Company Truck for hunting season, for free. That use is taxable to the employee. They might be getting the use of an $85,000 truck and their tax at year end is $800. That's **bleep** reasonable. They just don't get to use company resources of "listed property" for free.

The IRS doesn't allow us to move all costs of living into our businesses and then write it off.

Maybe that will help you explain the problem(s) to this owner.