Car trade
This is a business activity involving the purchase and sale of new or used cars, commercial vehicles or specialised machinery, and often the provision of ancillary services (e.g. warranties, leasing, insurance, servicing) to customers.
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ACCOUNTING FOR CAR DEALERSHIPS
Car sales can be both B2C (sales to individuals) and B2B (sales to businesses). New car sales usually involve cooperation with manufacturers’ dealerships and showrooms, compliance with official standards and warranties. The sales of used vehicles are mainly conducted with various partners in the supply and sales chain: foreign auctions (Copart, IAA, Mobile.de, BCA, etc.), leasing and insurance companies, dealerships.
The main features of this activity are the seasonality, the international nature of the activity, the application of VAT and other taxes, and the accounting and value of cars as goods.
Special margin VAT scheme for used cars
Used car sales are often subject to a VAT margin scheme, where VAT is charged only on the mark-up and not on the total amount of the sale. Our competent accountants will correctly account for and declare margin VAT, ensuring that there is a clear distinction between cars covered by this scheme and those covered by standard VAT.
Accounting for high-value fixed assets
Our clients include companies dealing in high-value vehicles, so we keep an accurate individual cost accounting for each vehicle, including purchase price, transport costs, registration or preparation for sale.
Accounting for import transactions
Car dealerships often import vehicles from the EU or third countries. Our accountants ensure that import VAT is correctly accounted for, that customs duties and other import-related costs are correctly accounted for, and that these costs are correctly included in the cost price.
Accounting for car rental or leasing services
Some car dealerships offer short- or long-term rental and leasing finance. In these cases, our accountants keep records of the leasing income, instalments paid, interest or long-term leases.
Warehouse accounting for cars
Cars are temporarily stored as goods in a warehouse (stock), but due to their high value, each car is often accounted for individually. Our accountants ensure a clear record of stock movements and monitor the status of the cars accounted for (what has been sold, reserved or held in stock).
Deposits and advance payments
Buyers often pay deposits or advance payments for reserved cars. So our bookkeeping specialists ensure that advance payments are correctly accounted for.
Accounting for a car dealership requires an accountant to:
understand the specifics of the VAT margin;
accurately accounting for the cost of each car;
manage import and warranty processes;
be able to work on high-value transactions and frequently changing financing decisions.