How to Sell a Company Car
Selling a company car is a normal part of your business’s life cycle. Whether you’re updating your fleet, reorganising company assets or an employee or director is returning a vehicle, the moment you decide to sell, the questions start rolling in: Can I sell a company car to myself? What’s the correct process for selling a company car to an employee? Do I need to charge GST? What about Fringe Benefits Tax or roadworthy requirements?
This SellTheCar guide breaks everything down clearly and helps you understand the legal requirements, tax obligations, documents you need and VicRoads rules so you can sell a company car confidently, safely and for the best value.
What Is a Company Car?
A company car is any vehicle purchased, financed or leased under the business name. It may be used exclusively for business or shared with employees or directors. Because the vehicle is tied to the company, selling it involves ATO tax rules, corporate authorisation and VicRoads ownership transfer requirements.
Understanding how the car was originally acquired paid outright, financed or part of a novated lease helps determine your:
- Tax obligations
- GST requirements
- FBT exposure
- Correct transfer process
Types of Company Car Ownership
- Outright Purchase: Company owns the vehicle fully and can sell it anytime, subject to GST and ATO balancing adjustment rules.
- Financed Vehicle: Loan or chattel mortgage arrangement; a payout is usually required before the vehicle can be sold or transferred.
- Leased or Novated Lease: Car ownership stays with the lease provider until the lease-end buyout is completed; the business must finalise the payout before selling.
- Corporate Fleet Arrangements: Vehicles may be operated under a trading name or fleet account, making it important to ensure registration records match the correct business entity.
Related Article: Switching Ownership of Vehicle: How to Transfer Vehicle Registration in Australia
How to Sell a Company Car in Australia
Step 1: Confirm Legal Ownership in Victoria
Before selling the company car, ensure:
- The registered operator is the company (not a director personally).
- There are no outstanding finance or PPSR liens.
The lender approves the sale (if the vehicle is under finance). - If leased, the lease buyout is completed.
- A director or authorised corporate officer has approved the sale.
- The company name on VicRoads registration matches the ABN/trading name.
Tip: Keep documents such as purchase invoice, finance contract, service history, depreciation schedule and ATO logbook records.
Step 2: Determine the Fair Market Value (FMV)
The ATO requires sales between a business and its director/employee to occur at Fair Market Value to avoid tax issues.
Use a combination of valuation sources:
- Carsales listings
- RedBook / Glass’s Guide
- Car dealership appraisal
- Internal fleet valuation
- Trade-in quotes
Why FMV matters:
- ATO uses FMV to calculate FBT if sold below market value
- Determines GST payable
- Impacts balancing adjustment (gain or loss on disposal of asset)
Example
FMV: $18,000
Sold to director: $12,000
Difference: $6,000 taxable benefit → may trigger FBT.
Related Article: How Do I Find the Market Value of My Car in Australia?
Step 3: Understand ATO Tax Implications
GST on Sale (critical ATO rule)
If your business is registered for GST, you must charge 10% GST on the sale price in most cases.
GST applies even if:
- The company car is sold to the director or employee
- GST credits were not claimed when purchased
- Vehicle is fully depreciated
Example:
Sale price: $12,000
GST (10%): $1,200
Total paid: $13,200
GST amount must be included in your next BAS.
Balancing Adjustment
When a business sells a vehicle, the ATO requires a “balancing adjustment”:
- If sale price > written-down value (WDV) → profit, added to taxable income
- If sale price < WDV → balancing deduction, reduces taxable income
Example
WDV: $7,500
Sale price: $10,000
Balancing adjustment: +$2,500 taxable income
Fringe Benefits Tax (FBT)
If selling a company car to a director or employee below FMV, the ATO may consider the discount a fringe benefit.
FBT value = FMV – employee’s purchase price
This must be lodged in the employer’s FBT return if over the threshold.
Related Article: The 12 Most Common Mistakes People Make When Selling a Car in Australia
Step 4: Selling a Company Car to a Director or Employee
This is highly regulated by the ATO.
Requirements:
- Must sell at fair market value
- Must charge GST where applicable
- Must issue a company bill of sale
- Must document reason for sale (ATO audit protection)
- Must assess potential FBT liability
- Must keep a signed corporate authorisation
Documents to Prepare:
- FMV valuation evidence
- Director/employee identification
- Corporate authorisation letter
- Bill of sale with GST itemised
- Roadworthy Certificate (Victoria requires RWC)
- VicRoads transfer forms
- PPSR check
Important Warning:
Even when selling internally:
- Never transfer vehicle ownership before payment is received.
- Do not release the keys until the bill of sale is signed and GST is settled.
Step 5: Selling to a Private Individual in Victoria
If the buyer is a member of the public:
Provide:
- Roadworthy Certificate (RWC)
- Signed bill of sale
- Proof the seller is the company
- Registration certificate
- Odometer reading
- PPSR free-title guarantee
Buyer completes:
- Transfer at VicRoads
- Pays stamp duty
- Updates registration
Step 6: Selling to Another Business
If selling to another company:
- Issue a tax invoice with GST
- Record ABN of buyer’s business
- Confirm authority of the buyer
- Provide RWC and transfer documentation
Step 7: Victorian Roadworthy Certificate (RWC) Requirements
In Victoria, an RWC is required for transfer of registration (unless selling unregistered).
Typical RWC Costs in Victoria:
- $180 – $280 for standard vehicles
- Higher for 4WDs or prestige cars
An RWC must be less than 30 days old at the time of transfer.
Selling a Company Car in Every State
Although this guide focuses on Victoria, here is how selling a company vehicle differs across Australia:
| State | Authority | Key Difference |
|---|---|---|
| VIC | VicRoads | RWC required; 30-day validity |
| NSW | Service NSW | Safety check (pink slip) required |
| QLD | TMR | Safety certificate required for sale |
| SA | Service SA | No inspection required for private sales |
| WA | DOT WA | No mandatory inspection unless defect notice |
| TAS | Transport Tasmania | Inspections only for defect or special cases |
| ACT | Access Canberra | Inspection may be required |
| NT | MVR | Roadworthy check required for older vehicles |
ATO tax rules (GST, FBT, balancing adjustment) apply nationwide.
Related Article: State-Based Regulations to Be Aware of When Selling Your Car in Australia
Conclusion
Selling a company car in Victoria requires careful attention to VicRoads transfer rules, Australian Taxation Office (ATO) tax obligations such as GST and FBT, proper documentation, and accurate valuation. Whether you’re selling to a director, employee, private buyer or another business, following the steps laid out in this guide helps protect your company and ensures a smooth, compliant sale.
At SellTheCar, we specialise in helping Melbourne-based businesses navigate this process. From providing a fair offer and handling all paperwork, to arranging vehicle pickup and ensuring secure payment, our streamlined service is designed to make your sale hassle-free. Trust SellTheCar to support you every step of the way when you’re ready to move your company vehicle so you can focus on what matters most, while we take care of the rest.
FAQs: Selling a Company Car in Australia
Can a company buy a car for a director?
Yes. A company can purchase a car for a director and many Australian businesses do this. However, if the director uses the vehicle for personal driving, the ATO may treat that personal use as a fringe benefit, which could create FBT obligations. If you’re unsure how this works or need help preparing for a sale, SellTheCar can guide you through the process and explain what records you should keep.
Can I sell a company car to myself as a director?
Yes, you can sell a company car to yourself but the sale must be at fair market value (FMV). You also need to handle any GST, complete a proper bill of sale and keep documentation in case the ATO reviews the transaction. If you buy it below FMV, it may create an FBT liability.
Do I need to charge GST when selling a company car?
If your business is registered for GST, then yes. You typically need to charge 10% GST when you sell a company vehicle. This applies even when the buyer is a director or employee. The GST must be included in your next BAS. If you’re unsure how GST affects your sale price, SellTheCar can provide guidance as part of their streamlined selling service.
What documents do I need to sell a company car?
Typically, you’ll need:
- A company bill of sale
- Proof of ownership (registration certificate)
- Company authorisation from a director or authorised officer
- A Roadworthy Certificate (RWC) if required in your state (mandatory in Victoria)
- A PPSR check to show the vehicle is free of finance
These documents help the buyer complete the transfer at their local transport authority, such as VicRoads in Victoria.
Can I transfer a company car online in Australia?
Some states allow parts of the transfer process online, but most require the buyer to visit their transport authority in person. For example, in Victoria, the buyer must finalise the transfer through VicRoads and may need to present original documents. Online tools can help, but you’ll still need to meet your legal requirements. If you prefer a hassle-free option, SellTheCar can assist with preparing the right documents before you complete the transfer.
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