When you operate a business, there are many unplanned expenses that you will incur along the way. Occasionally, you may need to creatively figure out ways to increase your cash flow to cover these expenses. If you happen to own company cars which you and your employees depend on for transportation, you know how important these vehicles are for the success of your business.
Did you know that these same cars could be of additional value when you are in need of cash? There are several different ways that you can turn your company car into cash. Here are a few options to consider.
Sell to a Third Party
One option that you have at your disposal is to simply sell the company car to a third party. With this option, you list the car you want to sell on websites such as AutoTrader and Craig’s List, or perhaps in a local publication’s classified ad section.
Once you find a buyer, you negotiate a sales price and collect payment from the buyer. This is one of the simplest options, but also one of the most time consuming, as it may be a challenge to find a buyer for your specific car.
Apply for a Title Loan
If you happen to live in one of the 16 states where it is a legal business transaction, such as Texas, getting a Texas title loan may be another option for you to consider. With this type of short-term loan, you work with a title lender to borrow against the value of your car. Basically, you take the title of your paid-off company car to a professional lender, and they loan you money equal to a percentage of the car’s value.
This is probably the fastest way for you to create cash flow. With just a driver’s license and proper documentation, title lenders can give you up to $5,000 for your company vehicle, often in an hour or less of your time. Another benefit to this type of loan, is that you keep your company car while you make payments to the lender.
Applying for title loans is a great option to consider when you don’t want to give up your company car, but do need additional money to grow your business.
Selling to a Business
In addition to selling to private parties, you may also be able to sell your company cars to other companies that are in the business of buying and selling cars. Some dealers and auction companies specialize in purchasing used company vehicles in which to sell for their own profit.
When you choose these types of auto buying services, they typically do not pay full market value for the cars, but they take the hassle out of finding a private buyer.
Selling Your Cars at Auction
Yet another option you may want to consider is selling your car at an auto auction. With the help of an auctioneer, your company vehicles are sold to the highest bidders. The auctioneer starts the bidding at a minimum price and then take bids on the car. Depending on the market, the auction format can generate a fair price for your car, and the excitement of the auction may even drive the bid higher than you expected.
On the other hand, if the type of car you are selling is not in high demand, you may not be able to get anywhere near the full market value of your company cars. It is a bit of a gamble that you take when you choose an auction forum.
Whether you choose to sell or borrow against your vehicles, there are many different ways to generate the cash you need for your business using your cars as collateral. Consider what’s most important for your company, including time, effort and monetary return on your chosen option.
Remember, it’s often best to consider the big financial picture when it comes to any business decision.
About the Author: Karla M. Somers is a writer and small business owner who is always looking for ways to increase cash flow. She is a contributing writer for the lending professionals at TitleMasters, a company that specializes in helping businesses and individuals in Texas and Georgia discover affordable financial solutions.