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      10-22-2009, 05:47 PM   #1
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Question about buying a used car from a private seller

If you were to get a used car from a private seller, not a dealer, how would the process work? I know most dealers have financial services to give you a loan so how would it work with an individual? Lets say you get your loan with a bank, how do they get their money? You write them a check?
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      10-22-2009, 05:50 PM   #2
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umm... cash? or check
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      10-22-2009, 06:19 PM   #3
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Ok one more question. Do i still have to pay a sales tax if I buy it from a private seller?
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      10-22-2009, 06:32 PM   #4
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From the seller no... BUT I believe when you go to DMV and register the car... then they will charge. Use tax or something like that? Not sure...
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      10-22-2009, 06:44 PM   #5
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Quote:
Originally Posted by Pink Taco View Post
From the seller no... BUT I believe when you go to DMV and register the car... then they will charge. Use tax or something like that? Not sure...
Some states (like Missouri) charge sales tax on a percentage of the declared sale price. Other states (like Texas) charge an index tax based on the car's Kelly Blue Book value. Still others (like Oregon and Montana) don't charge sales tax on automobiles.
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      10-22-2009, 06:52 PM   #6
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Quote:
Originally Posted by .:bHd:. View Post
If you were to get a used car from a private seller, not a dealer, how would the process work? I know most dealers have financial services to give you a loan so how would it work with an individual? Lets say you get your loan with a bank, how do they get their money? You write them a check?
hey you should follow your own signature
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      10-22-2009, 07:10 PM   #7
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Originally Posted by Citizen Z View Post
Some states (like Missouri) charge sales tax on a percentage of the declared sale price. Other states (like Texas) charge an index tax based on the car's Kelly Blue Book value. Still others (like Oregon and Montana) don't charge sales tax on automobiles.
This...CT recently switched to using the KBB value for calculating sales tax. Before that, everyone would make out the bill of sale for a little less than what we actually paid to save on the tax.
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      10-22-2009, 07:24 PM   #8
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Originally Posted by samwoo2go View Post
hey you should follow your own signature
lmao I did and it's confusing as hell. You pretty much don't pay the tax to the person you buy the car from but you pay it to the state when you register your car at the DMV. Can you declare the car's value $5,000 instead of lets say $25,000 and pay the tax for just that much? Or better yet tell the seller to declare it as a gift
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      10-22-2009, 07:33 PM   #9
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You could meet up at a bank or credit union and have them do the whole process for you. They should be able to process the DMV paperwork and everything there (and send it in for you). The seller would receive a check from the bank that day and all of his/her information would be kept with the bank.
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      10-22-2009, 08:03 PM   #10
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Quote:
Originally Posted by .:bHd:. View Post
lmao I did and it's confusing as hell. You pretty much don't pay the tax to the person you buy the car from but you pay it to the state when you register your car at the DMV. Can you declare the car's value $5,000 instead of lets say $25,000 and pay the tax for just that much? Or better yet tell the seller to declare it as a gift
there is a annual limit of $12K for tax free gift to 1 person, which means you can't claim "gift" if the value is way over 12K.

on not declaring true value, the DMV will want to see the bill of sale.
Now on a cash purchase (even if you got a loan it can still be a cash purchase. as long as you got the check first and then paid the seller cash later in 2 separate moves.) its ease to do, because the bill of sale is bascially just a piece of paper signed by both buyer and seller and the price on it. (so this means you can write anything you want. and if it is obvious that the vehicle is worth more, like you bought an Enzo for $5000, DMV might ask why, then you just have to say, its a friend thats hooking you up.)
If you meet up at a bank and did the whole thing in 1 step with the bank's help, you will have problems because the bank becomes the witness to the sale and they will draw up the bill of sale and you are stuck with whatever that amount is)

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      10-22-2009, 08:39 PM   #11
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When I sold my previous car privately, I met the buyer at his credit union. The credit union asked me to sign some papers in addition to the title. Then they issued me a check. I believe he paid sales tax. The credit union took care of his registration and title work.
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      10-22-2009, 08:44 PM   #12
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Originally Posted by .:bHd:. View Post
lmao I did and it's confusing as hell. You pretty much don't pay the tax to the person you buy the car from but you pay it to the state when you register your car at the DMV. Can you declare the car's value $5,000 instead of lets say $25,000 and pay the tax for just that much? Or better yet tell the seller to declare it as a gift

CA charges "Use Tax" on the selling price of the car. This just happens to be equal to the sales tax for the county you live in.

If the sale price is that far below what the car is worth, then the DMV will question you on what you actually paid for the car.
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      10-22-2009, 08:52 PM   #13
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Quote:
Originally Posted by samwoo2go View Post
there is a annual limit of $12K for tax free gift to 1 person, which means you can't claim "gift" if the value is way over 12K.

on not declaring true value, the DMV will want to see the bill of sale.
Now on a cash purchase (even if you got a loan it can still be a cash purchase. as long as you got the check first and then paid the seller cash later in 2 separate moves.) its ease to do, because the bill of sale is bascially just a piece of paper signed by both buyer and seller and the price on it. (so this means you can write anything you want. and if it is obvious that the vehicle is worth more, like you bought an Enzo for $5000, DMV might ask why, then you just have to say, its a friend thats hooking you up.)
If you meet up at a bank and did the whole thing in 1 step with the bank's help, you will have problems because the bank becomes the witness to the sale and they will draw up the bill of sale and you are stuck with whatever that amount is)

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Im NOT teaching you how to cheat taxes and Im NOT encouraging you to either. Im simply an information machine. What you do on your own I do not care.
Oh wow thanks bro thats freakin smart. You think sellers would agree to this though?
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      10-22-2009, 08:56 PM   #14
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Quote:
Originally Posted by .:bHd:. View Post
lmao I did and it's confusing as hell. You pretty much don't pay the tax to the person you buy the car from but you pay it to the state when you register your car at the DMV. Can you declare the car's value $5,000 instead of lets say $25,000 and pay the tax for just that much? Or better yet tell the seller to declare it as a gift
This would be a big red flag and would be a dumb thing to do...in my other post I meant reducing the declared amount by like 5-10% max
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      10-22-2009, 09:18 PM   #15
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Not really...
Gotta find someone desperate then. I mean on a $25,000 car you're gonna be paying $2,500 just for tax. If there is a way to legal avoid it, then why no do it?
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      10-22-2009, 09:20 PM   #16
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Gotta find someone desperate then. I mean on a $25,000 car you're gonna be paying $2,500 just for tax. If there is a way to legal avoid it, then why no do it?
10% sales tax? Our general sales tax here is 8.25%, but sales tax on vehicles is only 6.5%.
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      10-22-2009, 09:41 PM   #17
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10% sales tax? Our general sales tax here is 8.25%, but sales tax on vehicles is only 6.5%.
It's 10% here in the people's republic of bankrupt entitlement programs.
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      10-23-2009, 12:06 AM   #18
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Quote:
Originally Posted by dark335i View Post
Not really...
well Im actually not sure on this but, doesn't the seller incur a tax also at year end for selling the car and not writting it off as a gift? maybe some kind of income tax?

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Originally Posted by yomama69 View Post
10% sales tax? Our general sales tax here is 8.25%, but sales tax on vehicles is only 6.5%.
LA county sales tax 9.75%
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      10-23-2009, 01:59 AM   #19
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Quote:
Originally Posted by .:bHd:. View Post
lmao I did and it's confusing as hell. You pretty much don't pay the tax to the person you buy the car from but you pay it to the state when you register your car at the DMV. Can you declare the car's value $5,000 instead of lets say $25,000 and pay the tax for just that much? Or better yet tell the seller to declare it as a gift
my one friend use to buy and sell cars and trucks all the time. when he went to register them he would say he bought it for $5 or $10 and the dmv never said anything to him. he did this for over 10 cars in a few years.

granted these cars were only like in the 6k range you could give it a shot and see if it works.
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      10-23-2009, 08:28 AM   #20
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I think it all depends on the circumstances.

My fiancee's dad recently gave me the Saturn my fiancee has been driving because he was sick of dealing with the insurance, inspection, registration, etc. It was in fact a gift; I identified it as such and entered $0 for the sale price. The lady at the DMV didn't look twice, but it's a Saturn.
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      10-23-2009, 01:04 PM   #21
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I know for a fact that CA does not care what you say you paid for the car, unless you have a receipt form a dealer. They will simply take the KBB retail value for the car and charge you the tax and registration on that value.

On the whole gift thing, I had vehicle when I live in CA which was true gift from my dad, which is my 53 Ford Pickup and I went to register in CA and they asked me how much I paid and told them $0 since it was gift and they said that was not allowed since the computer would not accept $0, so I said fine put a $1 in and that did not work. The minimum at the time was $100 so they used that since they could not find a 53 ford in the KBB. I had to pay tax and registration on the $100 even though the truck at the time was worth well over $10K due to all the modifications but they could not asses that from the picture I brought with me.

My other example was a Mustang I bought in CA and paid obviously more then what the KBB said it was worth but told the DMV I paid less and they looked up the KKB value and charged me base on that not what I really paid.
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      10-23-2009, 01:28 PM   #22
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Just say you bought the car for 200$ ... but instead pay the guy the original price lolol... that is if he lets you.

less tax... Since CA is in financial crap right now they shall rape you in sales taxes
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