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Does your business own a fleet of vehicles? According to an article in the Wall Street Journal, used car prices in the United States are up 29% year-over-year. This is a stark contrast from the traditional 30% depreciation that vehicles attain the moment they are driven off the lot.
What does this mean for you and your business?
First, you may want to consider postponing fleet purchases for a year or so until the shortage of microchips in the automobile market resolves and prices began to normalize.
Second, think about the fleet of cars you already have. If your business has vehicles sitting idle right now, you may be able to turn those unused assets into cash. Currently, dealerships are offering $3,000 or more above the original purchase price to buy back those cars. This is astounding considering that purchase price was the value of the car nearly two or three years ago.
If you have cars that are being underutilized, now is the time to sell them at a premium and take advantage of this phenomenon. This unique change in the demand for cars is an opportunity for your business to increase cash reserves and achieve your goals.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
This post contains trusted sources. All references are hyperlinked at the end of the article to take readers directly to the source.
Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
