Cash boost for used cars
One quick and easy way to get instant funds is to sell one or more of your company vehicles.
Right now is a perfect time to sell a used fleet vehicle because the used car market is running hot. Businesses are receiving record prices for their second-hand cars, with some models selling for 70% of the new car price when they are just three years old.
So, if your business vehicles are being used for revenue-generating activities less than 80% of the time, could they be more valuable as cash?
Why are used car prices so high?
A simple supply and demand mismatch is causing used car prices to continue rising in 2021 – now at 30% above pre-COVID levels.
Prices for used cars started to increase in May 2020 when Australia was released from its first national lockdown. Public transport was considered a COVID risk, so many commuters opted to buy cars to drive to work.
At the same time, new car supply was disrupted by factory closures and supply chain issues, so there was no longer a consistent supply of quality used cars.
The market relies on businesses, government, and rental car companies to buy half of all new cars sold each year and sell them on again within two to three years. When this cycle is disrupted, it causes a shortage of quality second-hand fleet cars.
What if I need a car again quickly?
Although the new car supply is tight, there are vehicles available for purchase if you are willing to be flexible. But the question is, do you really need them?
Mobility is the new buzzword for businesses that need to move employees and goods around the city. By considering how far people need to travel and how often, companies are looking at alternatives to fleet cars to save money and reduce carbon emissions.
Taxis and rideshares are great for making a few small trips every now and then. Carshare and vehicle rental are better options for longer trips over several days during a month.
If sales pick up and your business needs extra cars quickly for daily travel, car subscription and leasing become the best options for longer periods of 30 days or more.
By focusing on mobility rather than car ownership, your business can start using cash for growth instead of having it locked away in underutilised assets.
What’s my car worth?
There are many factors that affect a vehicle’s value, such as age, kilometres travelled, make, model and condition.
The quickest way to sell a fleet vehicle is through a car dealership. They are currently desperate for stock, so getting a quote and payment on the same day is becoming standard practice.
If you’re happy to sell it yourself, add $4,000 to the price quoted by the car dealer and it should be close to market value, with some room for negotiation.
Another quick and easy option is to search current used car sale listings online.
Finally, the used market may drop quickly once things return to normal, so if you’re chasing a quick cash injection to grow your business, do your research, get yourself informed and act quickly. If you need a cash boost, there’s no better time to cash in on your unused cars.
