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selling cars without a dealer license

Discussion in 'The Hokey Ass Message Board' started by sixbangr, Jan 14, 2011.

  1. bobwop
    Joined: Jan 13, 2008
    Posts: 6,082


    it may not be accurate to say "alot of dealers" take that path, but certainly some do. Hopefully the prospective buyers can figure that out.

    On the other hand, some dealers do it right. The prospective buyer at least has a chance of making an informed decision.

    It would also be unfair to suggest that a "car flipper" does not provide adequate information. I am certain many provide full disclosure.

    No matter what, flipping cars on open titles is illegal. In WI, you can sell five cars per year that are titled in your name. It is still illegal to sell a car that is titled in somebody else's name.

    Not that anybody on the HAMB, and especially on this thread, would ever do such a thing.:eek:
    lothiandon1940 likes this.
  2. mspurgeon
    Joined: Aug 11, 2010
    Posts: 48


    What if you bought a whole bunch of parts that when assembled ended up all fitting the same car. Couple different bill of sales, one for a body, one for a frame and one for some supension parts.
  3. 1957Custom
    Joined: Jul 26, 2009
    Posts: 231

    from Tulsa Ok

    I have wanted to say this my entire life & now I can, thank God I live in Oklahoma! We have limitations but no one checks. I sell at a minimum 1 a year & some years 10 or more, no problems
  4. sixbangr
    Joined: Jul 17, 2010
    Posts: 211


    He just emailed me. He has contacted a lawyer and we may have info as early as next Tuesday. The car is in his and her name. The 3 he sold, I don't know if they were or not.
  5. c-10 simplex
    Joined: Aug 24, 2009
    Posts: 1,331

    c-10 simplex

    Another way is to have the seller form a "shelf corporation/company." Seller then titles the car under the company name. You/the buyer pay the seller for the car but the company name on the title stays the same. Essentially you are "buying" the company. Legally, ownership of the car has changed, but to the state DMV ownership has not changed since the name on the title has not changed.

    An additional benefit is that it saves on sales tax.
  6. sodbuster
    Joined: Oct 15, 2001
    Posts: 4,945

    from Kansas

    Aren't you just buying "parts"?
    Last edited: Jan 15, 2011
  7. oldpaint
    Joined: Jul 25, 2009
    Posts: 357


    In MN it used to be that you could transfer from father to son without any tax just a small, $5-$10 transfer fee. Might check to see if there is something like that in WY and if they have children buy it from the kids.
  8. Mr48chev
    Joined: Dec 28, 2007
    Posts: 26,493


    A motor vehicle dealers license in the State of Washington is 750.00
    From what I can find you can sell up to four cars a year without a license but the fifth will bring up a red flag. I had a friend get a visit from the state when he was 17 years old in 1964 or 65 for selling too many cars in a year so this has been in effect for a long time.

    We have a huge problem with Curbstoners here locally and most of their cars come from back street shops that buy a half dozen wrecks and weld them together to make two or three cars to stick out for sale with no inspections and often suspect work done on them. The curbstoners are the reason for the rule in the first place. One old Mall parking lot in town often has more cars with for sale signs than some legit car lots in town have on the lot.
  9. carcrazyjohn
    Joined: Apr 16, 2008
    Posts: 4,844

    from trevose pa

    buy it and title it later .Stay in touch with him .No law in him giving you the car is there ....They dont have to know about money do the deal in cash ............
  10. Francisco Plumbero
    Joined: May 6, 2010
    Posts: 2,536

    Francisco Plumbero
    from il.

    Pay the guy cash and sign a paper saying he gave you the car. A man is not dealing if he is giving his property away. This way his backside is covered.
  11. sixbangr
    Joined: Jul 17, 2010
    Posts: 211


    I offered to just that. He is a bit gun shy right now. After the lawyer talks to him next week, maybe he will be ok.
  12. burnout2614
    Joined: Sep 21, 2009
    Posts: 612


    I was a dealer /wholesaler back in the late 90's. After one yr I dropped the dealer license and kept wholesaler for a few yrs. To be a dealer you MUST have a on-site title agent. This requires a separate bond and license. It IS all about the money. The state/county is SO afraid of not making enough on all our poor-ass dealings! Lawyers? My former partner is a lawyer and our courthouse let him tag a Lincoln for 9 YEARS with NO TITLE!!!!!!!!! peace
  13. Hnstray
    Joined: Aug 23, 2009
    Posts: 11,237

    from Quincy, IL

    I agree with theHIGHLANDER. I was a licensed car dealer in Illinois from 1976 thru 2009. At the same time I was a private collector and bought and sold my own cars at will. But, there were in my name, sales tax paid, etc.

    For years I've heard the "urban legend" that you can only sell so many cars a year or you have to get a license.......have NEVER seen it in print. If you are "curbstoning" cars, and some one complains or you are noticed, and you are "jumping title", well yes, you can and likely will get into trouble.

    I cannot believe that the fellow in Wyoming is prevented from selling as many cars as he owns PROVIDING that he legally titled them when he acquired them. If he has met that condition, it is my opinion he needs to go higher up the pay grade and draw attention to this abuse of authority or ignorance by the State 'Investigator'.

    lothiandon1940 likes this.
  14. -Brent-
    Joined: Nov 20, 2006
    Posts: 5,154


    The IRS loves when people get creative. :mad:

    I agree.

    How in the world did this guy get an investigator so quick? Things must be slow in WY.
    Joined: Jun 3, 2005
    Posts: 7,972


    This is where the "APPLAUSE" sign gets lit up. I'm constantly amazed at how many folks are like hogs led to slaughter over such things. Years ago my dear ol Dad had a deal with a local finance company and was able to buy their repos for jumbo deals. He'd clean em up, fix things here n there, title em and drive em with for sale signs. Raising 5 kids he had to be creative as to making extra dough. I remember a 62 T-bird, a 64 Belair, a 63 Ford Galaxie, a 64 Ford Country Squire, and a 57 Dodge Coronet, all in one summer. Never ever did a state official contact us. Like I said before, a nosey and jealous neighbor tried to turn us in for being "dealers" many years later. I promise you all, the neighbor AND the city LOST. We were able to politely tell them "FUCK OFF".
  16. rustrodder
    Joined: Nov 15, 2005
    Posts: 276


    In Ohio-the limit is either 5 or 7-I can't remember. Any change of ownership is a "sell"-I gave a car to my daughter and it counted as a transaction. Just remember when you buy-put some cars in your wife's name or your teenaged kid's name. But amazingly any car traded in to a car dealership for a new(er) car does NOT count per my friend at the BMV. Those lobbyists did their work for the car dealers! alex
  17. Chief_Wannabe
    Joined: Sep 15, 2009
    Posts: 84

    from Ozark, MO

    Here it is in writing from the State of Missouri. If you violate this law it is the prosecuting attorneys responsiblility for action, and it's only a Class A misdemeanor. On a HAMB friendly note - Antique cars (25 years or older) are exempt. What's interesting is if you read through the double-talk, it basically says you're exempt if the titles are in your name. This directly contradicts the dealers manual. And of course, the reason for all this is contained in the very last paragraph.

    301.570. 1. It shall be unlawful for any person, partnership, corporation, company or association, unless the seller is a financial institution, or is selling repossessed motor vehicles or is disposing of vehicles used and titled solely in its ordinary course of business or is a collector of antique motor vehicles, to sell or display with an intent to sell six or more motor vehicles in a calendar year, except when such motor vehicles are registered in the name of the seller, unless such person, partnership, corporation, company or association is:
    (1) Licensed as a motor vehicle dealer by the department under the provisions of sections 301.550 to 301.573;
    (2) Exempt from licensure as a motor vehicle dealer pursuant to subsection 4 of section 301.559;
    (3) Selling commercial motor vehicles with a gross weight of at least nineteen thousand five hundred pounds, but only with respect to such commercial motor vehicles;
    (4) An auctioneer, acting at the request of the owner at an auction, when such auction is not a public motor vehicle auction.
    2. Any person, partnership, corporation, company or association that has reason to believe that the provisions of this section are being violated shall file a complaint with the prosecuting attorney in the county in which the violation occurred. The prosecuting attorney shall investigate the complaint and take appropriate action. 3. For the purposes of sections 301.550 to 301.573, the sale, barter, exchange, lease or rental with option to purchase of six or more motor vehicles in a calendar year by any person, partnership, corporation, company or association, whether or not the motor vehicles are owned by them, shall be prima facie evidence of intent to make a profit or gain of money and such person, partnership, corporation, company or association shall be deemed to be acting as a motor vehicle dealer without a license.
  18. The proper term is "shell corporation" which is usually used to hide shady business practices and hide/launder money.
  19. Hnstray
    Joined: Aug 23, 2009
    Posts: 11,237

    from Quincy, IL

    I am sorry, but this is a grossly misinformed opinion.........much more complicated, and expensive, and creates a whole new set of problems. Corporations are not so casually formed and when they are formed incur substantial obligations with several state agencies, not to mention the Feds.

    dan31 and lothiandon1940 like this.
  20. having a licence really doesn't protect a buyer if the vehicle is sold "as-is", all it does is let the state dig deeper into your already small net after they rape you on payday. they can kiss my ass!!
  21. frank spittle
    Joined: Jan 29, 2009
    Posts: 1,674

    frank spittle

    OK guys, please know what is legal in your state. This is serious. You can get in a lot of trouble. I have been a register dealer here in North Carolina for 38 years and see first hand how good guys get huge fines and in some cases get arrested and jailed. The DMV does not "Mess around". FACT: Here, it is a felony to have an open title in your possession. That being a title signed by the previous owner and not transfered to a new owner (blank). It is a felony not only for dealers but individuals too. If they catch you they will charge you and it will be costly. A judge may dismiss your case but most likely not. The best you can hope for is high legal fees.

    For collectors with large collections it is not a problem if you are buying several a year. You must title them in your name or business name AND NOT SELL THEM. You can buy as many as you want in a year. You just can't sell them that year. For collectors who are constantly revolving there collection it can be a problem. In our state that is considered a non complying dealership. Some are forced to get set up as a dealer. If you build a 100 car collection and sell out in a year you may get flagged and investigated but should be ok. But you can expect the IRS will check to make sure the income was reported. Don't take ANYTHING for granted. Know what your state requires AND COMPLY. Here, I think it is 5 or 7 cars. Most of the guys I know who have bought and sold cars on the side are now either dealers or have given up the part time business. I know a couple hard headed shakey guys who wish they had done one or the other.
  22. fordcragar
    Joined: Dec 28, 2005
    Posts: 3,180

    from Yakima WA.

    Go buy the car and bring it back to Kansas, have the guy date the title to last year some time. If the guy gets any grief from the Wyoming DMV he can tell them he sold the car last year, trying to clean out some of his stuff and the new owner must not have transferred it after getting home. The only potential with this is your state might have a penalty for not transferring a title within a certain number of days . The Kansas DMV could care less how many cars a guy in Wyoming sells, as long as the titles are legit.
  23. Fatbob309
    Joined: Jan 1, 2009
    Posts: 491


    More than once I sold tires that came with a title... I paid a guy for an eng and trans that came with a title and jeep sitting on it... Its all in how you want to work it.
  24. 71buickfreak
    Joined: Sep 26, 2006
    Posts: 610

    from Oklahoma

    Another question is if you are taking it to Kansas and title it there, the state of wyoming is not informed about the title transfer. It just eventually disappears from the system. In Oklahoma, registration records CAN purged after 5 years of non-register. I have had cars that had not bee tagged in 5 years been purged and then I have had cars that sat unreg'd for 15 and still in the system. You can check on the proceedures in Kansas, but he should not have any real issues if you title it in KS.

    Yet another reason to not title projects until they are road ready.
  25. Abomb
    Joined: Oct 14, 2006
    Posts: 1,659


    If the car is 1976 or older, you could buy the car with a bill of sale only, and title it fresh in KS. If the car is newer than 1949, you will have to get a VIN verification done by the Sherriff's office or KHP. If the car is 1949 or older, and the vehicle is sold inside the state of KS (wink wink), a bill of sale is all you need, and it doesn't even need to be notarized. The info would not make it back to the state of Wyoming this way, therefore the previous owner did not sell you a car. I would use the official Kansas state form for this, you can pick one up at the courthouse in St. Francis....if the treasurer knows what he or she is doing anyway.

    If you title it in KS using the Wyoming title, that transfer WILL run back through the Wyoming DMV or State treasurer's office, and they WILL know that the man sold another car

    I am not a lawyer, and I don't play one on TV...but I titled my 1930 Model A with a bill of sale only, no VIN verification, no questions, no nothing, and I had my title in less than 2 weeks.
    Last edited: Jan 15, 2011
  26. 71buickfreak
    Joined: Sep 26, 2006
    Posts: 610

    from Oklahoma

    Good call Abomb.
    Joined: Jun 3, 2005
    Posts: 7,972


    There's some good points made, especially Mr. Spittle's. I read the Michigan link too. I don't care about it. The idea behind it is just what it says, curbstoning. It's unconstitutional for a gov't agency to have a hand your titled property and it's dispositions that you PERSONALLY establish. No, I'm not a lawer either. Once titled property is "TAX PAID" most every form of gov't is done with it. Some states wanna fuck you over if it's in restoration or storage and try to take it from you. Also uncostitutional and a violation of one's civil rights. If you create a disturbance with your activities that's where the laws basically begin and end. There are protections for collectors as well. In the end it's human beings in charge and they bring with them all of the frailties and ignorance they practice in their own lives. Knowing that, proceed with caution but stand up for yourself.

    Here's one for ya. I own 8 titled vehicles. I'm in severe medical distress and I have to liquidate my fleet. Do I need to be a dealer to sell MY property for funds to save my life? Do I need to go to the the expense and waiting period of becoming a dealer so the the state can have their end? Are they going to fine and jail me because I got sick and had to liquidate? I'll bet not. I know a collector who had over 75 cars, maybe more. Same scenario. No problems liquidating them. I knew another collector who'd bought and sold maybe 8 cars in one year getting his collection where he wanted it. Nobody ever bothered him either. The reasons were a proper paper trail and TAXES PAID. That's all they want.
  28. Here let me adjust that target for you--- maybe no one has seen it yet or better yet how about spot lighting yourself!! In Wi the fine is 500 for each title you FLOAT minimum!! Thats why I have a license.......In the long run it costs a lot not to.. Our government at work wow do you feel safer ?
  29. Hot Rods Ta Hell
    Joined: Apr 20, 2008
    Posts: 4,028

    Hot Rods Ta Hell

    If he just started selling off cars and didn't sell any last year; ackdate the bill of sale on the next 2 he sells to 12/31/10. The buyer should be able to transfer title this month w/o any penalties in most ststes.

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