Why are Sellers Title Jumping?
Posted by 2ManyQs2@reddit | askcarguys | View on Reddit | 172 comments
I am looking to purchase a used truck or SUV.
Going through Martketplace, it seems like 90% of the sellers are title jumping.
It is so common the first question I ask is, "Is the title in your name?"
VERY few come back with "Yes".
If they are trying to be sneaking, the reply is, "Clean Title".
In California, title jumping is illegal.
But when I contacted DMV, they directed me to a web page where I could complain about the seller.
Obviously meant for a dealership that is doing it, not private parties.
My guess is that these sellers are buying at auction, fixing them if they need to, then 'reselling'.
Besides being illegal (on them), what are the pitfalls of buying from such a seller?
I guess these sellers MIGHT have an auto resellers license?? Are 'resellers' allowed to title jump?
Thanks for any advice.
Wolfsburg78@reddit
Sellers flipping cars title jump to avoid paying taxes that will erode any profit.
jrileyy229@reddit
Sales tax and title transfer fees when they buy it, then capital gains tax on the net profit on the back end. So basically call it 50% if your profit margin.
In most states you are only allowed to buy and resell a car a couple of times in a year... You can buy ten new cars and sell ten of your old cars, no problem... It's when you buy car A B and C in March and then sell those same three cars in June, you're clearly flipping. Which is fine, but now they will be looking come tax season and want you to get dealer license to do this on the books... Which is more than a $50 admin fee for a piece of paper...
You need a lease or purchase physical retail property, zoned appropriately and adheres to all ADA and whatever laws... and a business insurance policy.
Now you see why dealers have to make the margins they do, even small one man operation dealers... They're required to have a $7k a month lease on a small piece of land and $2k a month insurance and another grand for overhead.... So they've got to make ten grand a month profit just to break even, and anything over that they give 33% to the government.
Where Bob is his garage off the books can afford to do cheap repairs and only make a grand on a car and move it along when he gets to pocket all of that with no expenses
AlmiranteCrujido@reddit
IOW, you support tax cheats.
You'd have to pay income tax in some form on the spread, regardless.
Everyone else has to pay income tax on their income, why should car resellers somehow be exempt?
BlazinZAA@reddit
Paying income tax is fine, paying a sales tax for private party cars is ridiculous. I'm in full support of avoiding that tax in states that have it.
AlmiranteCrujido@reddit
Tax cheating is tax cheating. Move to another state, or vote in representatives more to your liking if you don't like it.
BlazinZAA@reddit
Just because it's illegal doesn't mean it's wrong.
AlmiranteCrujido@reddit
While that's true in general, tax evasion is a case where it's both illegal AND wrong.
BlazinZAA@reddit
Don't know what to tell you, I don't believe it's right for the state to be double dipping on sales tax. Here in WA it's almost 9% in my county. It's ridiculous to pay 9% Everytime you buy a car, and it's ridiculous the requirements that the dealer lobby has put in for someone to be able to start a business selling cars.
jrileyy229@reddit
And then there is: "Just because it's wrong doesn't mean it's illegal." Which is how big corporations operate. Like Apple havening hundreds of billions of dollars from US tax returns for years... Until the government cut them a tax break to bring that money back into the US. Illegal, no. Wrong, richest company in the world wanting tax breaks, many would say yes.
Running a little off the books business flipping cars is both wrong and illegal.
If you want to do that, just pay taxes... Or move.. and while you're making thousands of dollars a month, you shouldn't also be collecting paychecks from the government because you're reporting zero income.
jrileyy229@reddit
What is IOW?
I'm not advocating for them not paying... I'm just saying what I didn't see anyone else say..
The off the books flippers, It's not just saving on taxes and fees up front, it's also saving on taxes on the back end... Which you would need to report on if you did car flips above board.
AlmiranteCrujido@reddit
Well, if you're just describing "it's not just sales tax they're cheating on, they're probably cheating on other taxes," then, yeah, tax cheats are gonna tax cheat.
robert32940@reddit
If you want a squeaky clean buying experience buy new from a dealer.
If you're trying to get a deal, you're going to encounter flippers on marketplace.
How much does it cost to register/title the type of vehicle you're looking to buy? It's cost me almost $500 before to get a car registered and a title issued in my name.
That's probably the profit margin these people have on some of these cars.
Not everything has to be done by the book just because you think it should be done that way.
Do you like trains?
AlmiranteCrujido@reddit
Wow, actually defending flippers?
It's folks like you (and the used dealers) who've made sure that "buy new, keep forever" remains a viable and often preferable way to own cars.
jules083@reddit
Sometimes a car is just begging to be flipped. I've only done it a few times, but still.
I'm a 'buy used, keep forever' person. Buy them with a few little problems dirt cheap, fix them, drive until they're too far gone then sell them cheap. It's very rare I sell a car that's not totalled or rusted away.
AlmiranteCrujido@reddit
Except when you're not, and you feel like cheating the state.
Advanced_Tackle_9723@reddit
Hahaha...I've been fleeced the worst by dealers.
robert32940@reddit
We're talking about a person who is already trying to get people in trouble for this, they deserve a dealership "experience".
2ManyQs2@reddit (OP)
The "experience" doesn't matter if there are no issues, whether from a dealer, or private party.
It's the "experience" when something goes wrong.
With dealerships, there is recourse. Even without warranties, there are lemon laws.
Same with 'legal' private sellers.
What are the recourse with title jumpers? Unless out of the goodness of their heart, they take the vehicle back & refund your money.
OlliHF@reddit
What recourse do you think you have with a "legal" private seller? I was under the impression that private sales are pretty much always as-is.
2ManyQs2@reddit (OP)
In California, if you ask enough questions, or if the seller is stating the vehicle is in perfect condition with no issues, then it is found that there were issues that the seller knew about, it is a case of fraud.
Of course is always buyer beware, still, it is not illegal.
hoytmobley@reddit
That’s…optimistic
Substantial_Depth927@reddit
Love how a dealer can say "squeeky clean" without laughing his ass off...
WizeAdz@reddit
I like planes, trains, AND automobiles.
Milnoc@reddit
Those aren't pillows.
sulaco83@reddit
If that's the margins on flipping cars then maybe they shouldn't be flipping cars and ruining good deals for people who actually want them.
cdsbigsby@reddit
Sellers title jump because they avoid paying taxes on the purchase price, simple as that.
robo_robb@reddit
I don’t condone title jumping, but the concept of paying taxes on a USED car is wild to me.
apimpnamedkirby@reddit
It’s even wilder that it doesn’t go by sale price or condition. Everything is fair NADA value. Ive payed more in taxes than Ive paid for the car before.
publicsausage@reddit
Not here. And people definitely do game it, pretty much every car I've ever bought was $200 😉
jaqattack02@reddit
In my state they have a minimum tax they'll charge, so even if you buy the car for $1 you'll pay that. I think it's like $75 or $100.
Outside_Orchid_1576@reddit
My state, the minimum charge is based on market value of the car. Just paid 180 in taxes on a used car that was given to use.
squats_and_sugars@reddit
My state reserves the right to charge fair market value if it throws a flag as too undervalued (like a 2024 G wagon with a sale price listed as $100) but for older vehicles I've never had an issue as the value can swing so wildly. E.g. a non running 2nd gen is worth $500 whereas a clean 12 valve Cummins truck could run $30k.
BreakFun2436@reddit
That's just your state. Someone should sue the state for that one though. Pretty illegal to overvalue a vehicle to increase tax revenue
Cynyr36@reddit
Then you have sellers selling a car for $1 and a vanity sticker for $10,999, such shenanigans.
SaoirseMayes@reddit
That's how selling weed used to be legal in Washington DC. It was illegal to sell weed, but not illegal to give people weed as a gift if they bought something else.
wdn@reddit
Where I am (not even USA) they went from taxing based on sale price to book value because almost no-one in a private sale between two individuals was giving the true sake price.
It's no longer claiming to be based on the actual value of the individual vehicle. It's like there can be other fees based on the vehicle weight, etc.
HobsHere@reddit
Illegal against what law? When the state law specifically says that taxes are due on the fair market value, not purchase price?
BreakFun2436@reddit
Then vote out your oppressors. The state cannot determine fair market value. It's impossible. They are not part of the negotiation.
HobsHere@reddit
Here at least, it's just tax due on the purchase. Renewals are just $80 or so, depending on county. Some states charge several percent of the value every year.
Draco-REX@reddit
Hate to tell you, but you're paying taxes with taxed money. The government taxes your money coming and going.
dbear496@reddit
You don't have to remind me 🤦
SidKafizz@reddit
The .gov must have its cut whenever money changes hands. Car transaction sales tax is a significant revenue stream.
Satins_Cock@reddit
Not when the sales price is $1 😉
AsarsonDuck@reddit
Depends on state, if the DMV/Tag Agency deems the sell value as being undervalued (I.e. you can’t use $1000 on a 2019 BMW either) they will look up the fair market value for the vehicle and charge you taxes on that no matter what you paid
DanR5224@reddit
WA has a form that let's you explain why you didn't pay retail. Just fill in the empty box with everything that's wrong with it.
1funnyguy4fun@reddit
We gifted a car to our daughter when she moved to Washington and had to fill out a form explaining that so she didn’t have to pay taxes on the fair market value of the car.
As a side note, coming from a red state and interacting with a DMV from a blue state, you can definitely see where the tax money is going. Easily my best experience with a government entity.
DanR5224@reddit
Exept in this blue state I have to pay fee to tell the state that I sold a car, which is also *conveniently "required by law". Such BS.
AsarsonDuck@reddit
I’m in a red state and have to pay a fee to prove I have insurance on my car at yearly registration, which is obviously required by law
NotTurtleEnough@reddit
Me too, but it’s $3 every two years, so 🤷♂️
DanR5224@reddit
That's dumb
Satins_Cock@reddit
Yeah bud, that's every state. Florida has a big tax on bringing used cars into the state, on top of all the other fees.
DanR5224@reddit
They don't all charge money to do it, though.
BobcatSig@reddit
I see you, fellow Wershingtonian
Ponklemoose@reddit
In WA the title offices are for profit franchises.
NotTurtleEnough@reddit
Same in Oklahoma. It works pretty well as the bad ones close up pretty fast.
NotTurtleEnough@reddit
Umm… California DMV is the worst experience I’ve ever had…
Mblid@reddit
Analyses show that while blue states contribute more in federal taxes, red states often have a higher reliance on federal funds for their budgets, creating a net flow of federal money from blue states to red states.
Morscerta9116@reddit
🤣🤣 I went from a blue state to a red state and thought, this is miles better than back home.
Hersbird@reddit
Just because it's a gift, doesn't mean you don't owe taxes based on fair market value
cans-of-swine@reddit
Why the hell should you pay taxes on a gift?
Hersbird@reddit
I don't think we should pay taxes on most things but that's not the way your politicians have set it up.
AKADriver@reddit
A gift between immediate family is usually tax-free. Their situation is one case where additional explanation is sometimes needed though, I had the same problem when I moved to Maryland and transferred my registration from my parents.
mxracer888@reddit
I don't think that's really a political party thing. Utah is a red state and the DMV/DLD system is top notch. It's been prolly 10 years since I last dealt with Californias stuff, but Utah is a million miles ahead of anything I've experienced.
And at least in Utah, for gifts as long as the last name is the same they don't really bat an eye, just accept it and go. On non-gifts when they ask why I got it so cheap I just say "I'm a mechanic and buy vehicles others can't afford to fix. New engine and transmission are easy for me to do if I need" and they accept that, again no forms. Motorcycles, cars, trailers, everything I buy is essentially totaled to a normal person but not to me cause I can fix it cheap.
phatelectribe@reddit
CA dmv has massive upped their game in the last decade, to the point my opinion is it’s a really well run agency. Just about everything can be done online or through AAA, and even with super crunchy situations like getting a grey market vintage import registered, they at least have the hoops that need to be jumped through well documented. Also going to the DMC used to be hellacious- it’s now quite efficient and the last three times I went I didn’t wait more than 30 mins.
It’s a lot more red tapey than say Montana or S Dakota who give no fucks about anything, but at least the system now works.
trickedx5@reddit
yup. I tried to "sell" my cousin a truck for $1000 even he said to put $5k so he doesn't get caught. truck was worth $8k
Bullitt4514@reddit
When i lived in Vegas, i bought an 87 mustang notchback for $1000 in 1999. They didnt go by the title, they did a vin inspection and went off vslue
RareCareer7666@reddit
That's how everyone did it in my state for a long time. Sadly they changed it where they go by the blue book value now.
ScaryfatkidGT@reddit
Here it’s anything $1200 and under
RickySlayer9@reddit
Welcome to America
jetty_junkie@reddit
That’s not the only reason the title jump. States require you to obtain a dealer’s license in order to sell more than a set number of vehicles per year. People title jump to avoid this requirement
bush_wrangler@reddit
Every car I sell I write I sell it for 500 or 1000 bucks as is. Why is the 6th owner paying taxes again
gonzal2020@reddit
I don't have any love for it either, but the tax is on the transaction (sales tax), though it is tied to the value of the car.
cdsbigsby@reddit
You're not wrong.
BaseballAcrobatic815@reddit
I understand dealers charging taxes as they buy the vehicle and pay taxes on it or give tax credit. But when buying used from owner its pointless and should be illegal.
Harkers144@reddit
100% Correct
Advanced_Tackle_9723@reddit
In Washington they do it because titling the car in your name costs hundreds of dollars. Really no sketchyness, just common sense.
ReallySmallWeenus@reddit
It’s definitely sketchy, even if not maliciously so. The only enforceable warranty on a private party used car is that the seller can prove they own the car. This is an excerpt taken from a common NC private party bill of sale:
If you buy an “open title,” ie, a title only signed by the seller, you are accepting that you are unlikely to have any recourse if something goes wrong when registering or titling your vehicle.
Logizyme@reddit
It is not sketchy. A signed title means the last registered owner has released their interest in the vehicle. At that point, possession of the signed title is ownership of the vehicle.
In order for it to be sketchy all of the following has to have happened: the vehicle has to be stolen, the title has to be stolen and the signature has to be forged.
Any concerns you may have can be resolved recording the drivers license of the seller and by the buyer and seller meeting at the licensing office and filing the title transfer there.
ReallySmallWeenus@reddit
So, nothing can go wrong except in the very real example you provided. A few things:
I have bought many private party cars in my life. Never has anyone been willing to meet at a tag office and wait around for an hour or more while I get the title transferred successfully.
The seller can’t file a title transfer for a car they don’t own on paper; and they don’t own the open title car on paper. Them being there has no value while you do the title transfer has no value.
Recording their ID may help the police find who stole the car but wouldn’t give you any recourse. You don’t get to keep the car. You likely have a claim against the seller for the money, but that will require legal action and you are unlikely to be able to collect.
Lastly, there are other circumstances without theft you can run into issues. I actually made the mistake of buying an open title car when I was 16 where the title was signed incorrectly by original the seller. It couldn’t be registered without finding the original seller. The original seller had moved and was very difficult to reach, so it took months to get my $400 car registered semi-legally.
2ManyQs2@reddit (OP)
Which makes me think......IF I could get my name on the title transfer part BEFORE handing over the money, the vehicle is TECHNICALLY mine.
Since seller never put their name on the transfer part, they never owned it.
Right?
Probably would never happen, but legally.....
Logizyme@reddit
Yes. But then you'd be the one who managed to steal both a car and a title and forge a signature, but yeah go ahead and complain that car-flippers are the problem.
Logizyme@reddit
It has value in that if the title does not transfer for whatever reason, you unwind the deal right then and there and get your money back. If your seller won't do it, then just ignore them like you do for every title surfer.
Recording their ID means if they won't unwind the deal, or run with your money, you can file a police report for fraud and theft and you have someone to take to small claims (under 5k) or sue (over 5k). It means the seller has something to lose.
This is also solved by going to the licensing office with the seller.
Advanced_Tackle_9723@reddit
Exactly
Outside_Orchid_1576@reddit
The actual cost is close to 0. It’s mostly automated even in rural states.
jack-t-o-r-s@reddit
Not to mention the 10% "excise" tax...
Grand_Accountant_159@reddit
Taxes, getting a car dealer license, getting dealer plates, skipping all the business formalities and liabilities.
jetty_junkie@reddit
Not just that but all states limit the amount of used vehicles a person can sell without requiring a used car dealer license
ShitMcClit@reddit
And becuase without a dealership license you can only sell 2 cars a year in my state. Its an absurd absue of power sponsored by the car dealers.
2ManyQs2@reddit (OP)
That might be, but I am sure neighbors don't want to see a driveway, street & allies full of cars for sale.
2ManyQs2@reddit (OP)
That was my first thought too.
But I searched for that & what I found was that taxes are collected for California by the auction company.
'Sellers' would only be saving the registration fees, which, though not nothing, isn't much in the scheme of things.
Maybe the answer was wrong??
red18wrx@reddit
You also need to buy a license to sell more than a few cars in a year. Title jumping doesn't get added to how many cars you've sold.
Portland420informer@reddit
I’ve seen it a bunch in Oregon. No sales tax there.
cdsbigsby@reddit
Point B, they also don't want to pay for a dealer's license. In most states (including Oregon) there's a limit for how many cars you can sell per year before you need a dealership license. If you don't legally own the car, you don't need to get a license.
Occams_RZR900@reddit
Yep. It’s 5 per year in Oregon I believe.
TurkishSwag@reddit
And because their name isn’t on the paperwork anywhere, they’re not easily traceable when the car blows up a week later. I’m sure some title jumpers genuinely try to sell decent vehicles but the overwhelming majority are just looking to make a quick buck and disappear.
copperhead035@reddit
Or because they go through a lot of vehicles and don’t want to deal with becoming a legal dealer
Advanced_Tackle_9723@reddit
This too
Substantial_Depth927@reddit
Also avoid local bylaws that limit the number of cars one can sell without having to get a display lot and paying for a license.
MadDocOc@reddit
Usually it's someone who knows someone at a sketchy dealership/ someone with an auction license. They'll "borrow" an car that isn't moving and sell it as is. They've usually worked out a minimum price for the dealership and the rest gets pocketed.
When I went to the DMV in Houston, I realized noone cares. I did. So I dipped on that deal. FB marketplace is a wild place.
Blue_Veritas731@reddit
Title Jumping is illegal in ALL 50 STATES.
Depending on the state, the consequences of playing a part in that will vary. I live in VA, and although not intentional, I bought a travel trailer that the previous owner had not properly had titled in her name. When I tried to title it with the title she signed over to me, the VA DMV said, Nope. Even nearly two years later, I made the previous owner/seller get it straightened out on her end, so that I could have it properly titled in my name.
4x4Welder@reddit
Most states it's illegal. I'm not going to say I haven't done it, because I've lived in some places with crazy high taxes and long wait times for the paperwork. That tends to be the bigger issue, when it takes two months for the title to come back it makes buying and reselling inconvenient. Also many states have limits on how many vehicles you can buy and sell in a year without a dealer license, so if you can stay under the limit there's definitely a financial incentive.
Franican@reddit
All the idiots in the comments talking about "anyone complaining about this deserves to get fucked over by a dealer" are completely out of touch with the reality of buying a car. If someone's name isn't on the title, they can't legally sell you the car. If they can't legally sell you the car, then the previous owner can take it back from you and you're left chasing a fart in the wind to find that middle man for your money. The odds of this happening are slim, most title jumpers aren't THAT kind of scammer, but why risk it? It's a completely unnecessary risk, you don't know these people that you're going to buy the car from, you don't owe flippers special treatment just because they are trying to make money. If they aren't making enough money to register the car and make money on the car, then they shit the bed and need to sleep in it, don't sleep in a bed someone else has shit in. Don't let these flippers Amber Heard you.
aparkey@reddit
They also do it because most states have a limit on how many cars you can sell before you have to attain a dealers license
Fun-Discipline6978@reddit
I purchased numerous cars in California with the car being purchased from previous seller. As long as you have the pink slip and the person owning it is the one you’re buying it from there shouldn’t be an issue. Write a bill of a sale and go from there.
gmehodler42069741LFG@reddit
Because some of them are scumbags selling junk and some are just doing some side hustles.
No_Faithlessness8853@reddit
I title jumped once. My coworker was moving out of state and sold me his car for cheap. I forgot to tell my partner that I love with. She was very upset because we did not have room. I had 4 other cars but I only had parking for 2. This was already a conflict before I bought this car.
Remarkable_Ad5011@reddit
Because the like money…
Scazitar@reddit
Just to add to this since I don't see anyone mentioning it, some people do it to try to avoid having to get a dealers lisence. Many states have hard caps on how many cars you can sell in a year without one.
OregonMothafaquer@reddit
Because no one wants to pay a fee AND THEN wait 1-2 months for a new title
decadentmom@reddit
You stated the DMV referred you to a web page to report dealers who jump title. Just to clarify, California dealers generally never transfer the vehicles they purchase into their dealer name. Additionally, the vehicles purchased are wholesale buys, and are frequently sold several times before they are retail sales. Once a retail sale has been made, it is the dealers responsibility to have their vehicle's that are sold retail transferred into the buyers name. Therefore, a dealer "jumping title" is not an issue. A California dealer should never hand any transfer documents to a retail customer unless the customer demands said documents so the customer would normally never know how many times it exchanged hands. If they do demand all purchase docs, it makes no difference if the vehicle was sold between 25 wholesale dealers prior to this retail sale even if the title was never transferred to this dealer name. Each sale simply needs to be correctly documented.
When referring to a personal vehicle sale, as long as there is a documented, and clear trail of ownership, a vehicle can be transferred with no issue even if it has gone through several buyers before the actual DMV transfer is completed. The only difference in this transaction is a $15 fee for each additional transfer.
2ManyQs2@reddit (OP)
Can you direct me to this information on the Ca. DMV site, or any other site?
EVERYTHING I have read states that title jumping is ILLEGAL in California.
Would DMV look the other was? Probably.
I mean, would they void the sale? I'm sure not.
decadentmom@reddit
https://www.dmv.ca.gov/portal/handbook/vehicle-industry-registration-procedures-manual-2/transfers/multiple-transfers/
ScaryfatkidGT@reddit
It’s illegal everywhere but when you need to pay $1000’s in tax and it takes weeks to months to get the new title I get it…
Like why pay $1000’s to get something in your name that you don’t want
mikeysd123@reddit
Christ who cares, are you the IRS?
2ManyQs2@reddit (OP)
I care, and no, I am not the IRS.
InternationalBite690@reddit
A seller isn’t being shady for not retitling a car they plan to flip. Is it legal? Fuck Uncle Sam. That greedy bastard gets enough of everyone’s money to not need the pennies we’re talking about. If I don’t plan to drive it I’m not getting a title in my name. Other than feeding an already over fed government what would the purpose be to have it in my name?
angry_catto@reddit
florida has a 3 car a year limit rule without dealership license. if i want to do a fix and flip project i'm not registering it in my name. i don't half ass things and make sure the vehicle is solid before sale but i'm not getting a license for something a do a few times a year
RJsRX7@reddit
The sales tax angle is a sizable part of why it's done and is also why it's illegal to do.
I don't necessarily understand it, but then again I usually deal in vehicles cheap enough that sales tax is not a major consideration in any direction. Stuff around the $10,000 mark it starts to make sense, as we're now into hundreds of dollars to pay the taxes and transfer the title, but those are also the transactions I expect more scrutiny on.
TimboFor76@reddit
The state I live in, there is no sales tax on sales between private buyers. But… dmv appointments are 4-8 weeks out. Also if you have a 10am appointment it could be 4pm before you are seen. So for me, it’s just too much of a pain in the ass for a title transfer into my name. It also takes up to 6 weeks to receive your title. So it’s could be up to 3 1/2 months before you’re good to go on the paperwork. When I buy a busted car for $2000, I plan to have it fixed and out of my life in 3 weeks or less.
edthecollector70@reddit
Most of the time, title jumpers are flipping the car or truck. They bought it on the cheap and repaired what needed repaired. They would fix it as cheaply as possible using used parts or after-market parts. Many times, using stop leek or other products to cover up issues. Once you buy the car drive two days, the dash lights up like a Christmas tree. The seller is no were to be found. You are stuck with junk.
ToddtheRugerKid@reddit
I knew worked with a guy a few years ago that title jumped on his frequently changing rotation of project cars. He'd find various vehicles on Marketplace or craigslist, buy them and never sign the title. When he sole em, I guess the buyer just signed where he would've and it never looked like he was involved. Kinda shady if you ask me.
1TONcherk@reddit
I just helped my friend buy an XJ from a guy who never titled it. He just wanted some extra axles that were part of the deal and plans to polish up the XJ and move it on. We were all laughing about how we both technically exist in the history of this Jeep.
But yeah that was a $1,500 deal not $15,000.
jking7734@reddit
I think some states limit the number of vehicles one can sell w/o having to buy a dealer’s license. I’d bet some people flipping cars jump titles to get around buying a used dealer’s license.
Diligent_Bat499@reddit
Those "Dealers" are not real dealers just some guy with inventory
RickySlayer9@reddit
Filing paperwork at the DMV costs money.
A lot of people on FB marketplace flip cars. It’s got an issue, buy it for 1000$, fix it, sell it for 2000$
Why then are you going to pay taxes on the 1000$ and the 2000$ to daddy government? Thats silly.
As long as you have a clean chain of bills of sale, with matching signatures, you should be totally fine.
mozzerellastewpot@reddit
I own a shop and sometime people give me their car and title if they don’t want to fix it when it’s not worth much. Sometimes I scrap them some times I sell them cheap. I’m not paying sales tax just to turn around and get rid of the car or spend the day in the dmv. It’s only illegal because the state wants tax money. It makes absolutely no difference for you buying a car.
Ok-Ad8998@reddit
So they can avoid being licensed as a dealer because that increases overhead costs. As a private individual, they are limited in the number of cars they sell in a year, so they don't process the sales through their own name.
You can buy cars this way, especially if your state does not require a notary seal on sales, but you need to trust the seller is not a scammer. I bought my last vehicle from a guy who was flipping it, but he was a sheriff's deputy from the next county, so I figured I could find him if there was a problem. There wasn't.
Mayor_of_BBQ@reddit
The total jumping for a couple different reasons…
First and foremost, if they transfer the title into their name before selling it to you, they have to pay property tax and registration fees on the purchase
Secondly, and almost every state there is a threshold number of transactions that you can do before you have to become licensed as a car dealer. If you’re flipping a couple cars a month as a side hustle or a major job, you would run a foul of that number in short order and be required to procure a dealer license which has its own costs and regulatory oversight issues that these Shadetree mechanics and detailers don’t want to deal with.
In a nutshell, it’s all about avoiding paying taxes and fees
tads73@reddit
Avoid taxes and registration fees, insurance, their name being part of the transaction, skirt state limits on vehicle sales requiring dealer licenses. Even a person with a criminal background can do it.
dacaur@reddit
For the same reason why you will rarely get a great deal on used cars. They scour the used car marketplaces for great deals, go buy them, then resell at a higher price.
Getting the title out in their name not only eats I to their bottom line, but also slows things way down. In the time it takes to transfer one title into their name, they could buy and sell 7-8 cars easily...
j-christopher@reddit
The other pitfalls are all the other things they're either concealing or lying about.
SurlyJohn009@reddit
Worked at DV for 10 months in OR. Title jumping is about 50% of the transactions that involved selling.
I would inform customers that it was illegal and that they could not sell a vehicle without a title in their name, or a family member and most would just ignore me.
If someone can't provide a clean title, with their name or a direct family member name on the title, don't buy it. They are just trying to avoid taxes due or there are other issues like legal problems. Move on and buy something else with a legal title.
ff942da7ca2a@reddit
in MN, you can only buy/sell 7 vehicles per year before you must buy a dealers license. the requirements are kinda nuts for someone flipping solo out their garage.
kikiacab@reddit
It’s not a big deal
keithrc@reddit
TIL title jumping is illegal in Texas. I'm almost sure it didn't used to be- there used to just be a form you had to fill out for a "reassigned" title.
Miserable_You5150@reddit
Did it all the time. Buy a car (Audis mostly) with a broken timing belt, fix everything that needed to be fixed, and then sell the car for a small profit.
Always disclosed that that's what I did, so I didn't know much about the history of the car.
2ManyQs2@reddit (OP)
What would you have done if a buyer had an issue?
Would you take care of it, or was it "You knew what you were getting into"?
Miserable_You5150@reddit
An issue titling it? I would have given them their money back. An issue with the car? I can't make that my problem. Most of the cars I bought and sold were already pretty old and cheap. I can't be fixing every problem that pops up after they buy it.
Miserable_You5150@reddit
I should also note that in the state I'm in, you pay taxes on the car when you buy it and that's it. Not monthly or annual taxes.
jrileyy229@reddit
In all states you were to also report capitol gains taxes on the profits. Not going to get audited over one little Audi flip where the government didn't get their $200 bucks... But that is also part of it
Dry_Lingonberry1994@reddit
Tax avoidance. Good for them.
Crowlady77@reddit
Auction or otherwise if they are title jumping they are definitely flippers.
TapeDaddy@reddit
In my state, it’s $150 for a title, plus a bit of tax depending on its age or market value. It’s quite the racket.
I’m not condoning it, but I understand why people do it.
snapgeiger@reddit
Protects the seller. No way to show any involvement. Records will show buyer bought it from previous seller. So $$$ without consequence for the seller.
AlmiranteCrujido@reddit
Yeah, leaving it basically scamming the person who sold the car to the flipper.
Having had an irate 2nd buyer get in touch with me because some a*hole went and flipped the car I sold them, they're basically ruining the private party market for other folks.
Impossible_Bison_994@reddit
In North Carolina you are only allowed to sell 4 cars in 12 months before you are required to get a dealer's license or get fined. So car flippers will title jump to avoid having to get a dealer's license.
OpinionofanAH@reddit
In my state you can only buy/sell 5 cars per year without a dealers license. I know someone that makes a living flipping cars and rvs/camp trailers. He’ll drive up to the next state for a deal. He does a quick clean on most and lists them for what he thinks he can sell them fast for. I’m sure he title jumps every single one of them as he doesn’t have the necessary location to even qualify for a Dealers license. We don’t pay sales tax on private party purchases in my state so the only reason he does it this way is for convenience and not having to transfer titles and skirting the dealer laws. I’m sure he will be caught at some point and I hear the penalty’s are pretty harsh.
WildKarrdesEmporium@reddit
Biggest reason, IMHO, is to not hit your yearly limit of how many cars you can sell.
As for buying from this type of seller, probably about the same as buying from any other used car seller. Some will be good, some will be bad.
I'm certain I've bought title jumped cars in the past, they were all generally fine. Some were exceptional.
AlwaysVerloren@reddit
Just get a bill of sale from the person you're buying it from, then you're protected should something fishy comes back with the vehicle during inspection or registration.
FKpasswords@reddit
If I buy to flip, no need for me to put it in my name…..
hawken54321@reddit
Make sure you are not engaging in tax evasion. Calif can make your life difficult to engage in that felony which includes perjury charges.
Reejerey1@reddit
State just wants title transfer taxes. Only reason title jumping matters.
Impressive-Crab2251@reddit
If they enforced no title jumping you would end up paying more for the car. The whole point of buying a car off market place is to pay as little as possible. I’m more annoyed with all the rebuilt titles on marketplace, if you are going to sell a rebuilt title, it should have pictures of the before and after and a 50% discount.
EconomyTill7118@reddit
I sold a car year ago. It was in my name.took plates off,signed the title. And got paid for the car. Then about 6 months later. I get a letter saying car is in impound. I went down showed that .I had sold the car. apparently new owner left it in my name. So I said can I donate it to the police auction. Had to fill out a form. And was allowed to "collect * Anything in the car. I might want. Found some random tools in the trunk,Nike shoes still in box and about 25 bucks in change. So it's not just sellers jumping titles. Buyers will scam you also. Beware scammers are everywhere.
SubstantialKBB@reddit
Also running into this. I don't understand how we can buy any of these cars if we're buying from someone who doesn't have a title in their name?
thisdckaintFREEEE@reddit
They bought the car at auction, maybe fixed it up, and are now selling it. Rather than filling in their name as buyer on the title from the auction and paying the hundreds of dollars it'll cost them to put their name on the title of a car they have no intention to keep, they keep the title as is and put your name on straight from the auction to you.
The harm here is really minimal or non-existent other than the government not getting their cut of every time money changes hands. For you it's much safer than buying straight from the auction since you actually get to drive it and give it a better look over than just sitting in place at the auction. For the flipper they get to make a little profit on a side hustle.
I guess the more in-depth look at the full effect is just that if this suddenly was completely eliminated then far less people would find flipping auction cars to be worth it. Demand at auctions would drop a bit, prices at auctions might drop a little but maybe not since there'll still be plenty of dealers there bidding against each other. The cheap cars you're seeing for sale from individual sellers would be much more sparse since it would only be people selling their personal car on their own instead of so many flippers mixed in... I guess supply at used car dealers would go up so maybe their prices would go down a bit.
Overall though it's pretty harmless and even beneficial to buyers who understand the different risks to buying from the different sources available. It isn't some attempt to scam you or extra reason to be afraid to make the purchase. It's actually useful information, if the seller is honest about the fact they bought it at auction to flip and aren't familiar with the car's history then they're more likely being honest with what they did and didn't find wrong with it and what they did and didn't fix. Dealers, flippers, and individuals selling their personal car will all be a mix of people looking to make an honest sale and people who will tell any and every lie that might make them an extra dollar.
Confident_Guide_3866@reddit
Avoids taxes
Southtxranching@reddit
I make any seller meet me at the dmv when buying used to have them run the title right there to check for any leans, different subject but good advice.
chuck-u-farley-@reddit
I’ve personally done title jumping If the vehicle is gonna be in my possession less than 2 weeks ….. not because I want to avoid paying taxes….. more so I need to move the car and the state takes a month to get my title to me. It only takes me a week or so to get the vehicle ready for sale…. I can’t have this thing sitting here for that length of time “waiting “ on a title to arrive
priuspollution@reddit
For me I buy so many cars registering them would be absurd, considering I only drive a few of them (my daily’s). I also live in a no title for classic’s state and most of the unregistered ones are classic’s so you either get no title or an out of state title. For me if I never put it on the road I never bother with the dmv. Speeding is also illegal, but being the crazy criminal I am I’ll occasionally drive 40 in a 35 zone.
Opposite_Agency1229@reddit
In my state you can report the sale as the seller to prevent title jumping. I have had several people get fuming mad when I say I am gonna report it and storm off. I don’t want my name associated with the car if you decide to go do a drug deal, hit and run, or whatever.
myopini0n@reddit
Downsides are you might buy a salvage title car and not know it because the seller didn't get a new title. You might buy a car that the DMV won't accept the title for various reasons. This would leave you with a car you can't legally register, drive or sell.
Those things don't happen often, but they do happen.
For me, I always message first to verify their name is on the front of the the title and they will show id to verify. Low risk, but too much risk for me otherwise.
scottwax@reddit
I have a customer who found a 10,000 mile 2008 E92 M3 on Facebook marketplace. No title. Hadn't even been registered. The owner had the original bill of sale and the MOS aka manufacturer origin statement which is basically a cars birth certificate. The owner was in law enforcement, apparently could wave a badge and get out of driving a car with no plates. The paperwork the owner had said at the last major service the car had to be flatbedded in because it hadn't been started in 6 years.
My customer wouldn't be able to get a title with the owner's documents. What ended up happening is the original owner had to register the car and pay the sales tax on the original purchase price to sell the car. It was a two month process.
murpheeslw@reddit
Cause F the gov raping everyone on taxes repeatedly.
I’m not mad about it.
Carlmtz777@reddit
I honestly care less on a used car. Specially when the car is less than $7k. In my opinion get the mechanic to check the car (or if you are savvy enough do it yourself) a carfax report and check that the title doesn’t say branded, rebuilt, etc.
svv1tch@reddit
A lot of time car fax won't report the title as branded until it's issued. Which is when it changes hands. So that's why this sucks for buyer. Won't find a title issue until an updated title is actually issued
r34gtr1999@reddit
I buy cheap vehicles that need work to fix and resell. Between title fees and extra sales tax placed on vehicles, plus a "minimum value" that you're taxed on, it's a minimum of $400 to title a vehicle where I live. That doesn't include tags either. With how bad the market is these days that would take up any bit of profit. Luckily buyers of really cheap cars are usually just happy to be getting something to drive and don't care whose name is on the paperwork.
Lopsided-Public8205@reddit
It's your money. If you don't want an auction car, ask the seller for ID (be prepared to share yours as well). Check the name on the title, if they don't match, politely pass.
If this is all too match hassle, go to a dealer and pay their markup.
ResponsibleBank1387@reddit
Tons of scam out there. Some are just trying to avoid paying tax, some are selling without owning.
TheChair303@reddit
It's always a gamble when buying a used car. Even a certified pre-owned from a major dealership is a gamble. In fact I bought a brand new Silverado 3500 and it was nothing but trouble. I work at a dealership and title hopping is only for dealers. Some people are definitely trying to cheat the system bit some people just plain forgot to get the vehicle titled.
vtec_go_brrr16@reddit
So personally I have bought a car from someone who title jumped, didn’t realize until I got home that his name wasn’t on the title because I didn’t even know what title jumping was, it still had the name of the lady he bought the car from and said it was sold months before I purchased it. I called him out on it and made him meet me at the dmv in case there were any issues and surprisingly there weren’t. The DMV just listed it as if I’d purchased it when the title said it was sold, the few months before, so i guess the biggest thing for that is I had to pay a few extra months of property tax. I will never do that again though, it was sketchy and the only reason I went through with it is because I wouldn’t have gotten my money back and I needed a car badly. Definitely worth it to wait for someone legit with a clean title in their name.
Tool_junkie_1972@reddit
Laws vary from state to state but it’s safe to say title jumping is probably illegal everywhere. One of the pitfalls (I’m sure there may be others)of title jumping for the buyer is you don’t know if they have the real title or a duplicate. Or if it’s even a real title. Some are straight up scams, selling stolen vehicles.
That said , this is the most likely scenario: A lot of these folks have bought a car that needed repairs, slapped a band aid on it and now are trying to offload it before the band aid repair fails.