Can I sell my company car to myself?

Yes. The business sells the car to you as the buyer, with an authorized person signing the title for the business. Use fair market value as the price and document the sale with a bill of sale and, for corporations and many LLCs, a written resolution approving it.

Who signs the title when a business sells a car?

An officer, member, or manager with authority to sign for the business, writing the business name and their title, such as "ABC LLC, by Jane Smith, Member." Some states ask for proof of authority, like a resolution or letter on company letterhead, when the signer is not obvious.

Selling a company car: who signs, what price, and the tax side

Q: Does selling a company car to an employee cheaply create taxes?

Usually. A discount below fair market value on a company car sold to an employee is generally treated as taxable compensation, and a bargain sale to an owner can be treated as a distribution. Ask your accountant how to report it before you set the price.

Selling a company car: who signs, what price, and the tax side

The car has been in the business for years, and now the owner wants to keep it, an employee wants to buy it, or it's simply time to sell. Because the title is in the company's name, the company is the seller. That changes who signs, what paperwork the motor vehicle office wants, and how the price gets set.

The business is the seller

If the title shows a corporation or LLC as owner, only the business can sell the car. The person who drives it, even the owner, signs as a representative of the business, not personally. That matters at the title counter and later, if anyone questions the sale.

Signing for the business

Find who has authority. Usually an officer of a corporation, or a member or manager of an LLC.
Sign in the business's name, with your title: "Business name, by your name, your title."
Keep proof of authority ready. Some motor vehicle offices ask for a resolution or a letter on company letterhead.
Complete the odometer disclosure if the vehicle requires one. See the odometer disclosure statement.

Create a Vehicle Bill of Sale ($5) Selling on Behalf of a Business

Setting the price

When the buyer is an outsider, the price is whatever you agree on. When the buyer is an owner, a family member, or an employee, use fair market value and keep the evidence: a printout from a pricing guide or a dealer offer. A bargain sale to an employee is generally treated as taxable compensation, and a bargain sale to an owner can be treated as a distribution. Neither is a problem if you plan for it. Both cause trouble when nobody notices until tax time. The buyer still owes sales tax when they register the car in most states. See sales tax on a private sale.

The tax side for the business

If the business depreciated the vehicle, selling it for more than its remaining tax basis creates a gain, and part of that gain may be taxed as ordinary income. A sale for less can produce a loss. This is accountant territory, and it is worth a short call before the sale.

Loose ends

Loans. Company vehicles are often financed. The lender's lien has to be released before the title can transfer. See selling a vehicle with a loan.
Insurance. Remove the car from the business policy only after the sale closes, and make sure the buyer insures it first.
Plates and release of liability. See license plates and the release of liability.
Records. Keep the bill of sale and the resolution with the company's books.

Going the other way, from your name into the business? See selling your personal car to your own business.

Create Your Vehicle Bill of Sale ($5) →