5 Tips For Disposing Of Old Business Vehicles
As your business evolves, so does your fleet, and you’ll need to change them when they get too old and expensive to maintain. Studies show a conventional car can reach 300,000 or more miles in total, including a well-maintained company vehicle, and then you may have to get rid of it. But this process isn’t as straightforward as you may think, especially when dealing with a fleet. It requires careful consideration while ensuring compliance with environmental responsibility regulations and maximising value. Here are some important tips worth knowing when disposing of old business vehicles.
- Explore reselling or trading it in
If you want to maximise the disposal process, consider selling your old business vehicle or trading it in for a different one. Each option has advantages and disadvantages, and you must decide which option is best. But you must ensure that your cars still have a good resale value to get the most money possible. Reselling your vehicles can help recuperate a significant amount of your initial investment, and you’ll only need to add a little to it to purchase new ones. Once you identify your vehicle’s resale value, you can contact used vehicle dealers, other businesses or individual buyers interested in buying them. Of course, you’ll have to allow for negotiations, be transparent with each vehicle’s condition, and have all the necessary documents. You can also take advantage of online resale platforms and auctions to sell them off quickly.
- Find cash-for-car services
Find out if any cash-for-cars services are available in your location, as it’s one of the best ways to dispose of an old company car. Cash-for-car services are run by companies primarily interested in removing old cars from business premises and homes. Unlike selling to a dealer or an individual, a cash-for-cars company will come to your location and pay you a fair price for your car upfront before removing it from your premises. That means you won’t incur transport costs or bother about lengthy negotiations and staging processes. Plus, selling a car on your own might take quite a long time, and the vehicle’s condition might degenerate before you find a willing buyer. Aside from this, most cash-for-cars services recycle the old vehicles they purchase in a scrap metal yard. That means you’ll earn money and be environmentally responsible at the same time – a win-win situation.
- Donate them to nonprofits and charity organisations
If your old business vehicles are in good working condition or have years left, consider donating them to charity organisations and nonprofits as part of your company’s social responsibility. That is a smart way to dispose of an old vehicle while marketing your business to the locals. So it’s something worth looking into. However, take your time to research the right charity organisations before donating. You want a company that will use the vehicles in ways that align with your business goals. Opting for donations may also come with some tax benefits for your business, depending on your location. And speaking of taxes, the next tip is also important.
- Determine the tax consequences of disposing of your vehicles
Disposing of old business vehicles comes with some tax consequences. If you manage to sell your vehicles at a profit, you can expect to be taxed on that profit. So before you start making plans for your resale money, determine how much will go into taxes and what you’ll have left. There’s more bad news. Even if you sell your old vehicle at a loss or for less than you paid for it originally, you can still expect some tax consequences from the sale. That is particularly important if your business has benefited from tax deductions for vehicle depreciation for over a year. It means you may have enjoyed some tax benefits thanks to the depreciated value of your business car. Now, you can expect the tax deductions to even things up.
- Don’t forget about other housekeeping matters
Disposing an old company vehicle doesn’t mean simply getting rid of it and forgetting about it. It would help if you sorted out all housekeeping matters, including cancelling all vehicle registrations or transferring them to the new owner or disposal facility. You should also review or cancel your insurance coverage and ensure that your insurance company does not continue deducting fees after disposing of a vehicle. Also, remove all licence plates and notify all relevant governmental agencies about the disposal or change in ownership. The goal is to ensure that you have proper documentation for the transition to avoid legal issues or future liabilities regarding the vehicles.