Buying a Car to Resell

I

imported_hooked

New member
I know there was another post about this topic a while ago, but my searching has been unsuccessful.



I have an opportunity to buy a car cheap, recondition it, and hopefully sell it for a profit.



My question is, how does the process work with the Title? When I buy it, the owner has to sign the Title over to me right? Do I have to send away this title to the State and wait for a replacement title with my name on it before I can sell it?



P.S. I'm in Florida. The procedures are probably different state to state.
 
I'm thinking the answer to both your questions is "Yes". You could google your state's DMV -- or just give them a call. They are typiclaly very friendly people :)
 
You should call TLC or the Discovery channel and start a show called "Flip This Car". Good idea, I hope it works out well for you.



And you can not sell a car without the title being in your name (or your lender's name if you finance it).
 
Another possible issue is sales tax. Like in NY, you have to pay the sales tax when you apply for the title, even if you do not register the vehicle. That's how they make sure they get their money. I ran into this when registering a Subaru Impreza WRX STI for sale by owner shortly after I got it. If you are a used car dealer, you can buy the vehicle without paying the tax, but when it is sold in NY you are required to collect the sales tax. So they have their bases covered. For example, you can't buy box trucks for sale used in NY and plan to sell them at the end of your driveway. If you sell more than some certain number per year, I think it's like 3 or maybe 5, they automatically consider you to be a used car dealer and you have to be licensed. Then you might be giving implied warranties by law when selling vehicles too.
 
Thanks for the input. I want to do this the right way. I'm just trying to figure out if it's worth it or not. I did check the DMV site and it's $30 to transfer the title and another $30 probably for tax, so the fees are definitely eating into my profit margin here! Might not be worth it after all.
 
Ive been thinkin about doing this lately also. I dont see why i couldnt buy a vehicle for $1500-$2000 and then spend a week reconditioning it inside and out and then turn around and sell it for $500-$1000 more than i bought it for. The hardest part would be finding one that is in decent mechanical condition and does not have paint failure/rust/big dents.



I see cars on the side of the road for sale all the time in that price range that really just need a good recondtioning.
 
qballjr13 said:
You should call TLC or the Discovery channel and start a show called "Flip This Car". Good idea, I hope it works out well for you.



And you can not sell a car without the title being in your name (or your lender's name if you finance it).
Click to expand...



There was a show. I think it only lasted a few episodes-haven't seen it recently. I think it was on TLC.
 
I asked about this several months ago and people thought I was crazy. But I think it would work if you find the right car. You might not have success doing it often and making a lot of money, but there are plenty of cars out there that would bring more money if they were detailed. Heck, I sold a 1996 Olds in March and the guy commented several times on how great it looked. I think cars with single stage paints would probably be prime targets since they seem to oxidize and get dull easier than a CC paint.



As far as the title, I know I've heard of people not signing the title. My neighbor had a '69 Pontiac where he was the third owner, but the guy he bought it from never titled it. I think as long as the previous owner has signed it, you are good to go. But that may depend on the state too since I've seen it suggested that the owner and buyer should go together to have it done.
 
hooked said:
I know there was another post about this topic a while ago, but my searching has been unsuccessful.



I have an opportunity to buy a car cheap, recondition it, and hopefully sell it for a profit.



My question is, how does the process work with the Title? When I buy it, the owner has to sign the Title over to me right? Do I have to send away this title to the State and wait for a replacement title with my name on it before I can sell it?



P.S. I'm in Florida. The procedures are probably different state to state.
Click to expand...



In Florida, check with one of your local tag agencies about how quickly you can get a title. Some states will allow you to pay an extra fee and get the title in 10 days or less.



Also, you'll have to pay sales tax if you purchase it. Tax is collected by the tag agency.



In my state, it's 6% of the vehicle purchase price. YMMV
 
Grimm said:
As far as the title, I know I've heard of people not signing the title.
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If a person intends to buy it from one person and never register in their own name, then sell it to someone else, that's called "title jumping." The exception would be someone who is licensed as some sort of sales dealer in their state, but even dealerships leave their business name and signature on a title.



The reason people do it is to get out of paying sales tax and the costs associated with titling. Verrrry illegal in those situations



Also, what if the person you are selling to asks WHY your name is not the one on the title? Is the car and title stolen? What if the buyer is getting a loan to purchase? A financial institution will only make a check out to the name of the seller on the title. If a police inspection is required for out of state purchase or otherwise, you'll be caught trying to jump the title.



Some people will not turn in the original title on an older car because they want to have the original title as a keepsake and or selling point. In states requiring a title for registration and sale, a seller can file for a replacement title, claiming the original was lost or destroyed. The replacement serves as legal documentation and the old one (original) can be kept for sales and memorobilia purposes.
 
Thanks, folks. I knew I'd get a lot of great info here.



So, based on this info, this is the process:



1) Pay Original Owner of the car and he signs over the Title

2) Go to Tag Agency and pay for new Title and pay Sales Tax there?

3) At this point I need to insure the car?

4) After receiving new Title in my name, sell the car and sign the Title over to the new owner



Am I missing something or is something incorrect?
 
It's not worth it. First you must buy the car and have the title signed over to you. Then you must register and insure the car while simultaneously paying major sales tax. Only dealers can buy and sell without paying this tax. Remember, the government has their hand in every purchase you make in this life and that includes houses, cars, televisions and anything else you intend to buy. You don't think that they're gonna let you buy and sell cars without getting their piece of the pie do you? However, this is partly to protect you as well. Imagine someone smashing up your car during their test ride? Without insurance you would be screwed. Dealers have insurance that covers the dealer plate they attach to the car to avoid this. The bottom line is this: There are laws in place to prevent the public from doing exactly what your describing here. Moreover, don't forget the long wait to have the title mailed to you from the DMV that now has your name printed on it. Forget this idea. The rules are against you.



Patrick
 
hooked said:
Thanks, folks. I knew I'd get a lot of great info here.



So, based on this info, this is the process:



1) Pay Original Owner of the car and he signs over the Title

2) Go to Tag Agency and pay for new Title and pay Sales Tax there?

3) At this point I need to insure the car?

4) After receiving new Title in my name, sell the car and sign the Title over to the new owner



Am I missing something or is something incorrect?
Click to expand...



After all the expenses involved, profit might be missing.



Something else to consider: even though you may buy it right and do a lot of work, selling a car isn't always easy. It takes time to advertise, show it to people, and get an honest buyer with cash or good bank funds.



Another risk involved in peddling used vehicles: unforseen mechanical or electrical problems that occur after the sale

Related to this: what if a vehicle has issues that you are unaware of when you purchase? More money down the drain
 
All the same things can be said about houses, and people flip those all the time. Sure you run the risk of things going wrong, but if you go about it right I would think you could make some extra money. All you have to do is stumble upon the right cars. For example a kid on the Bonneville board I belong to just picked up a late 70's Bonneville. The owner was a nun that just died, and all he had to do was have the car towed away and he had a free car. I think the car ran fine, and he polished it and it looks like practically a new car. If he wanted he could probably get a couple grand for the car, quite a nice profit IMO.
 
'There are so many things that can go wrong when you try tl make a living selling cars.\r\n\r\n1. You are supposed to be licensed, he could be breaking the law.\r\n2. Where will he display the car for sale? Try selling just your car, probably not\r\na problem. But try selling car after car and there may be ordinances against this. There are in my area.\r\n3. Time spent hunting for the \"right\" car.\r\n4. What if the car has \"hidden\" damage, more expenses to fix it.\r\n5. Warranty? Even if you say it\'s as is picture somebody buying a car that dies soon after they purchase it. Do you think they won\'t try taking him to small claims court?\r\n\r\netc.\r\n\r\nThere are just WAY too many ways to lose money trying to make money buying and selling cars.\r\n\r\nI think he would be better off to offer his reconditioning / detailing services to the\r\nlocal used car dealers.\r\n\r\nIf he can make a car look better than what there employees could, I\'m sure they\r\nwould be glad to pay him to come in and detail a few cars each week.\r\n\r\nHe could be looking at just as much income without taking the risk of getting a lemon\r\ncar.'
 
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