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Flipping Newly Purchased Car

May be purchasing a car, repair it, and resell. I do not want to register it and pay the state tax. As will not put it on the road. Anyone have experience how that is done ? For example, does the bill of sale of car from previous buyer need to be processed differently ?

Or just transfer bill of sale/title to my name, and not register the car ?

TIA.

Old 01-05-2008, 05:44 AM
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I have been able to get a title, but no registratgion.
But your state's DMV laws may be different. Your best bet is probably to go to the DMV, explain what you want to do, and let them guide you.

Here in Washington State, we have privately-owned "sub-agents" that handle title issues. They are usually much better to work with than the actual DMV.
Old 01-05-2008, 06:51 AM
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There is not going to be any set way of doing it, since it is illegal.
Old 01-05-2008, 07:05 AM
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Open titles are illegal. Unless you are going to do this a lot, you should have no problems putting the car in your name and then selling it. This can actually work in your favor as the buyer will see that you truly own the car.

Most states allow you to process several titles each year in your name. Eventually they pick up on what you are doing and send you a letter warning that you've reached your limit. Then there's the IRS.... any profit should be reported as income. Yeah, I know it's not much money, but neither are the taxes compared to a tax evasion charge.
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Old 01-05-2008, 08:46 AM
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Quote:
Originally Posted by the View Post
There is not going to be any set way of doing it, since it is illegal.
A title in neccessary. Registration (the expensive part) is not.

I would never buy a car from a guy who does not have a clean title in his name, with no stories.

I am currently getting a title, but no registration, for a car I bought at an auction. A friend is going to make it a race car. As soon as the title arrives, I will sign it over to him, and he can get it registered in his name, as he wants to drive it to/from the track. Legal, and inexpensive.
Old 01-05-2008, 08:54 AM
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Depends on the state, I guess. If your state will issue a title to you without you registering the car (and paying the registration fee, and all applicable sales taxes, etc.), you are lucky.

That state is willing to give up a lot of revenue, including sales tax, by doing that.

In any event, what the poster above is proposing to do would definitely be illegal. As he readily admits in his post, he is trying to figure out a way to (1) buy a car, and (2) then resell it, while (3) avoiding paying the required sales tax on his purchase. That (avoiding applicable sales tax) is never going to be legal.
Old 01-05-2008, 09:02 AM
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Quote:
Originally Posted by the View Post
As he readily admits in his post, he is trying to figure out a way to (1) buy a car, and (2) then resell it, while (3) avoiding paying the required sales tax on his purchase. That (avoiding applicable sales tax) is never going to be legal.
Many states do not require any sales tax on private party auto sales. You should check your local laws. Buying and reselling something for a profit is not illegal. Typically the law will limit you to the number of times you can legally do it.
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Last edited by LeeH; 01-05-2008 at 10:23 AM..
Old 01-05-2008, 10:20 AM
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Maybe many states do not require sales tax, but HIS state does. He says so right in his post ("I do not want to register it and pay the state tax.")
Old 01-05-2008, 10:23 AM
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Quote:
Originally Posted by the View Post
Maybe many states do not require sales tax, but HIS state does. He says so right in his post.
Yep... that would be illegal.
If I could buy cars at the wholesale auction and sell them to individuals with no sales tax I'd be quite wealthy. However, if I did it a few times I'd lose my license and likely end up in jail.
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Last edited by LeeH; 01-05-2008 at 10:30 AM..
Old 01-05-2008, 10:25 AM
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Went to DMV and asked the questions as want to do this the right way.

Net: Even if car is not registered, I need to pay taxes. Want to keep it simple and it makes sense the more thinking about it, if buy mostly any item you need to pay taxes. I just thought if car wasn't registered it may be waived by state somehow.

Turns out not buying the car anyway, but not for this reason, but more for overall time/maybe speculation factor.

Thanks all for your input. Hope others learned, and it is correct to check with your own DMV as it may be different.

Last edited by luvair; 01-07-2008 at 07:14 AM..
Old 01-07-2008, 07:10 AM
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i suggest getting a dealer's license. in CA, it's not super difficult. aside from the paperwork, all you have to do is sell a car to a dealer within the first x months (where x=12 if i recall correctly), and then you can regularly repeat.
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Old 01-08-2008, 12:25 AM
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Quote:
Originally Posted by luvair View Post
May be purchasing a car, repair it, and resell. I do not want to register it and pay the state tax. As will not put it on the road. Anyone have experience how that is done ? For example, does the bill of sale of car from previous buyer need to be processed differently ?

Or just transfer bill of sale/title to my name, and not register the car ?

TIA.

You need a dealers license to avoid tax. However what you ask is easily done. Just do exactly what you outlined above. If you do this too many times you will get caught.. one or two will not be very risky.
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Old 01-08-2008, 03:11 AM
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In CA it is illegal, the state wants the $ everytime a car is bought and sold.

Old 01-08-2008, 07:30 AM
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