Many logistics companies want to keep their vehicles and equipment up to date. Especially when it comes to vehicles, companies often consider replacing them, even if the existing ones still have a higher residual value and can be put to the best possible use.
This is an opportunity to think about selling used operating equipment. If some tax and economic aspects are taken into account, this is often a promising option. This can increase liquidity for new purchases and guarantee the value of the operating devices for the company over their entire useful life.
WHEN IS IT WORTH SELLING OPERATING DEVICES?
Vehicles and machines are major investments for logistics companies. Accordingly, the expensive machinery and vehicle fleet is carefully maintained and serviced. Despite heavy use, the equipment is therefore always in optimum condition in terms of occupational safety and potential liability for technical defects.
Nevertheless, vehicle fleets get on in years. There can be various reasons for updating the equipment, including
- technical developments,
- Energy-saving effects,
- a restructuring,
- a cessation of operations or
- a transfer of business.
In all cases , the used operating devices may still have a high residual value. It can only be liquidated through a sale. As a general rule, if new, more modern equipment is to be purchased and machines and vehicles with a considerable residual value are still available, a sale of the used equipment should be considered. The aim is to release the hidden reserves hidden in the machinery.
General economic and tax aspects
Machinery is usually part of the business assets. The tax authorities therefore participate in the sale of used vehicles and machinery. If there is a difference between the depreciated book value and the purchase price achieved in favor of the seller, this profit is taxable. This tax background must be taken into account when determining the purchase price. Taxes must be factored in.
However, companies should not fall into the trap of trying to sell the used operating equipment for less than its book value. This applies in particular if the sale is made within closed company circles or to a company employee.
In this case, a long-serving employee may want to set up his own business with his own tractor unit and buys it from his former company. The company sells the tractor unit for less than the book value and wants to accommodate the loyal employee of many years.
In this case, you can expect unpleasant questions from the tax office. It is therefore always a good decision to obtain an expert opinion on the sales price in case of doubt in order to avoid disagreements with the tax office.
In addition, there will always be machines and vehicles that are more attractive on the market than others. Anyone thinking of selling an ensemble of different operating devices will achieve a reasonable result with a mixed calculation.
HOW IS THE SALES PROCESS ORGANIZED?
Companies can sell their used vehicles and machines independently on the market. However, these processes are time-consuming and take up human resources in terms of administration and organization. This is why many companies rely on the services of specialized providers who focus on the purchase and subsequent sale of used operating equipment.
It can be both an advantage and a disadvantage that these companies are particularly well versed in the used operating equipment market. They will not pay the highest prices. However, the entire sales process with them is simple and professional.
In addition, they are often prepared to purchase an entire used machine fleet. This means that a logistics provider can also get rid of vehicles or machines that are not in high demand on the market for used operating equipment.
Calculating the purchase price
The entire sales process should be preceded by a calculation of a purchase price that is worthwhile for the logistics provider. Here it is also important to be clear about where the lower limit for the calculated price lies.
The professionals among the buyers of used operating devices negotiate professionally and will always try to secure particularly good prices. It should be noted that any sale of used operating equipment can be better than scrapping hidden reserves. Especially when a company is in a somewhat precarious economic situation and urgently needs liquid funds for new vehicles, the sale of used equipment usually makes sense.
Further preliminary considerations
If a logistics company sells vehicles and machine parts without going out of business, further preliminary considerations are advisable. Logistics companies earn money with their vehicles and machines. There should therefore be no time gap between the sale of used vehicles and the purchase of new machines.
Here too, professional buyers usually prove to be less complicated to deal with because they know that their business partners are dependent on their machines being in operation.
If the delivery of the new vehicles is delayed, for example, a professional buyer would be more likely to accommodate you and let you continue to use the used vehicle. However, it always depends on the respective provider, the contractual conditions and the individual situation.
WHAT ELSE IS THERE TO CONSIDER WHEN SELLING USED OPERATING DEVICES?
A not unimportant issue is the possible warranty for used operating devices. Companies should pay attention to corresponding contractual clauses with professional purchasers. If they organize the sale themselves as logisticians, they should have the purchase contract drafted by an experienced lawyer.
Naturally, companies do not want to be liable for defects in the used goods they sell. That is why they will make use of all the possibilities provided by the law for exemption from liability.
The simplest rule here is “bought as seen”. However, most professional buyers will not agree to this. After all, the professionals among the buyers know how to protect themselves by checking the used operating devices beforehand.
It should be borne in mind that a later dispute about possible defects or deviations from the agreed terms can lead to lengthy and expensive legal disputes. In the end, the disclosure of hidden reserves is of no use to companies because they have to pay extra for the sale of used machines. For this reason, it is always important to ensure clear conditions regarding liability and the condition of the equipment sold.
Overall, it is advantageous to have experienced contract lawyers and the tax advisor take a second look at any contractual agreements on the sale of vehicles and machinery.
ARE THERE ANY DEVICES THAT ARE MORE OR LESS WORTH SELLING AFTER USE?
We have already pointed out that vehicles and equipment are proving to have varying degrees of appeal on the market. In general, it can be said that tractors in good condition will always find buyers. In terms of equipment, they are the heart of logistics and transport companies.
They also represent a major investment when new. For professional machinery buyers, these are very attractive machines that are in high demand. Due to the high investment sum, there may be one or two interested parties for a used tractor.
In view of the high investments made when purchasing the new machine, the subsequent sale of the used and well-maintained tractor unit can therefore be particularly worthwhile.
Economic situation and industry situation are decisive
There is no one-size-fits-all answer to the question of which machines or vehicles are particularly worth selling. The general economic situation and the situation in the logistics sector can be decisive.
If many companies in particular are struggling with economic difficulties in a crisis situation, the willingness to invest in new machines will tend to be low. This can trigger a high demand for used operating equipment.
At the same time, a general economic crisis or an industry crisis can lead to many companies wanting or having to sell used machinery at the same time. This could lead to a higher supply on the market and make a sale less worthwhile. It always depends on the situation. The various aspects should therefore be considered before selling used operating equipment.
Selling used vehicles is an individual decision for the company which, like all business decisions, should be based on sound economic foundations. It may be worth analyzing the market conditions a little longer before making a decision.
VALUABLE TIPS
There are a number of tips and recommendations to consider in order to profit from the sale of used operating devices. We have also summarized some points from this article:
- How much can be realized with used operating devices also depends on selling at the right time. Aspects of the company’s situation are taken into account, as are the general economic situation and the current industry situation.
- All aspects, including taxes, should be included in the preliminary calculation of the possible purchase price. It is important to carefully consider whether a professional buyer is the better alternative for the sales ideas. If only individual vehicles or machine parts are to be sold, a self-organized sale may be interesting.
- A sales transaction should be concluded on a purchase agreement that is favorable to the company. This will not always be possible with professional buyers. If necessary, companies should have contract forms checked by an experienced contract lawyer.
In particular, the focus should be on liability issues, warranty conditions and a correct description of the operating equipment. There is a risk of liability traps here if companies unknowingly agree to certain characteristics of a vehicle or machine that are not given in the end.
- It makes sense to always keep the possibility of selling used operating equipment in mind before making an investment decision for new machines and vehicles. If logistics companies succeed in releasing hidden reserves from used equipment, this increases their liquidity.
- From a business point of view, it should be a matter of course to sell used operating devices that still have an attractive value. Unused, functional devices represent an economic burden.
However, this always depends on the company’s individual economic plans and strategies. Logistics companies may want to expand their entire fleet by purchasing new vehicles and machines and use the used operating equipment themselves until the end of their service life.
CONCLUSION AND OUTLOOK
The sale of used operating equipment in logistics could still play an important role in the coming years. In times when technology and drive systems are changing, logistics companies want and need to be at the forefront of technical development with their machinery. New operating equipment is often also more economical in terms of energy consumption.
The industry is undergoing radical change due to digitalization. It is not yet possible to predict exactly whether there will be a market for used logistics machinery and vehicles in the long term. This development depends on many factors, including those of a general economic nature.
Logisticians should always make a decision for or against the sale of used vehicles taking into account many different aspects. It may be tempting to liquidate hidden reserves in the short term. However, selling is not always the right strategic decision.
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