Wednesday, May 20, 2009

How not to buy a car in another state and then exchange it between family members

Why are state-to-state transactions so difficult!?

My mom lives in DE, she bought a car in MD and didn't pay sales tax because Delaware doesn't believe in taxes. She bought the car and put both our names on the title. Lesson one: don't do this.

If you are going to buy a car and give it to your child who lives in a different state (especially one with tax/higher tax) this is what you should do:
1. buy the car in your name in whatever state
2. get the title in your name in that state
3. sign the title over in your state to your family member, in that state
4. have that family member request a new title in his/her state- if it is gifted in the other state and you have a title you shouldn't have to pay sales

What not to do:
1. sign your name and your giftee's/daughter's name on the title
2. register the car in your state
3. take the car to NY with only the giftee present at the DMV
4. have to get the other person to take a trip up to your state in order to show proof of ID and sign the paper- oh and pay NYS sales tax because the NY residents was on the original papers
5. be told the credit card machines aren't working (and you are going to owe more than $500- who carries that much cash? or a check book unless you expect to use it?!
6. have the credit card machine work (thankfully!)
7. get plates, get emissions testing and wait for new title in about 3 months

Ugh. What a frustrating experience! Ready to leave the city where hopefully things will be clearer.


  1. You simply have to be able say 'no, thanks at that price' at least once to the dealer. This gives them a strong message that you are serious about your research.

    You should also bring a piece of paper to the dealership and make sure you do all the math of the finance calculations yourself. The point is not that they will do the math wrong. The point is you will see exactly how the deal is structured. Do not be afraid to take the time to do this or look like a fool for mapping out your car deal in the dealership.

    My dad swears by this process,

  2. Seriously sounds so complicated in the USA to do any inter state buying and selling (here in the UK its very easy buying and selling between for example Scotland & England).

    Good luck with buying other things...