How To Sell My Car For Cash: A Guide For Self-Employed Business Owners | Your business doesn’t need to be huge to have a business car. Most self-employed business owners own at least one business car. These cars are important in helping with the smooth running of business errands, among other needs your business might have. But what happens when the car is no longer useful to the business, it’s totaled or you just need to dispose of it? In big corporations, it’s likely there are established policies on how to dispose of a car.
When you’re a self-employed business owner, on the other hand, you get to decide what to do with the car. Your accountant or financial advisor can help you determine the financial implications it’ll have on the business and what price range would be best to sell the car profitably.
Otherwise, follow this guide and learn the best way to sell your car for cash as a self-employed business owner.
Examine Your Options
If it’s not serving the business purpose anymore, your business needs a boost, or you’re looking for a change, why not just sell your car for cash? Fortunately, when it comes to disposing of your business car, there are various options available. They include auctions, trade-ins, online selling, employee sale, or through wholesale if you have several cars. In selling your business car, you are trying to enhance the liquidation value of the car. Remember that this will impact the value of your business through the amount of money raised by the sale.
Selling Your Car Directly
The option of selling the car directly, whether offline or online, is the best option when you’re trying to maximize its value. Here are the things you need to consider when trying to sell the care directly.
- Know the current market: Some cars sell faster than others. Business trucks and vans are steady sellers, so ensure not to underestimate their value.
- Price the car competitively: Through consulting your accountant and doing some research on how much people are asking for a similar vehicle.
- Get your car looking nice: Clean it well, vacuum, and repair obvious mechanical issues and defects.
- Know where to advertise: There are various methods you can use for maximum coverage such as social media posts, classifieds, or the old school ‘Car on Sale’ poster on your car.
Selling Through Consignment
Another good option is usually to through a consignment or trade-ins. While direct selling may take a lot of time trying to find and negotiate with a buyer, consignment selling may take less time and hassle with the possibility of selling the car at a higher price. It’s also safer to sell a car when it’s away from your home and at the dealer’s lot. This way, you don’t deal with strangers in your home or business premises, and is an option financial advisors recommend to time poor business owners.
Sell Through Car Buying Companies
Car buying companies exist for a reason. They’re also an excellent and easy option when you are considering selling your car. This method offers you a chance to easily give your business car away instead of waiting until you find an interested buyer.
This is beneficial to you; especially if you need cash right away. There are no worries about trade-ins and delays. The only major consideration you need is with the car buying company you choose to engage with.
How To Sell When Your Car Is Totaled
A totaled car is where a car’s repair costs exceed its pre-accident value. Totaled cars have more issues attached to them, and it can be tricky for you to sell. First, you’re probably yet to finish with the insurance company. You or the diver involved in the accident may have been at fault and need to pay liability above what the insurance covers.
There’s also a chance that the vehicle is still required as evidence in civil proceedings. Lastly, you’ll need to work closely with your accountant to write off the car’s asset value
For depreciating assets, the management is controlled by the Internal Revenue Service (IRS). The formula outlined for the depreciating value of a car opens the likelihood of selling the car at a higher market value due to tax reasons. This is how the value for totaled cars is determined. A car’s actual cash value determines the selling price, but you may sometimes accept a lower amount if there’s a tax benefit of doing that.
How To Determine Tax Consequences
Selling a business car comes with tax consequences that you’ll need to consider. You’ll encounter taxes and Roth IRA penalties when selling a business car. If your car sale generates a profit, you need to pay taxes to the IRS. If you have been claiming the depreciation value of your car and receiving tax deductions, you’ll need to pay the taxes you owe when you sell the car.
Ultimately, selling your business car isn’t something that should give you sleepless nights. The best way to do it is the one that gives you the best value with less hassle.