Hi Guys,

I'm new to the forums and I just had a quick question about financing. I apologize in advance to those that think I am really ignorant, but I just want to get my information straight before I purchase a G.

This will be the first car that I will be buying on my own by the way, thus I want all the information I can get.

1.) If I buy a car privately I do not pay taxes. (TRUE/FALSE?)

2.) The only person that really pays tax on a private transaction is the seller because they have to write it on their gross income when they file taxes for that year? (TRUE/FALSE?)

3.) (continuing with the question above) OR...do they only neef to report the NON-cash portion of the purchase? (i.e. I pay $15 grand in cash and pay the remainder witha loan) (TRUE/FALSE?)

4.) If I buy a car privately and need a loan to purchase the car can I technically get the loan from a bank without stating it is for an auto purchase? (TRUE/FALSE?)

5.) If the title (pink slip) is at hand do we jsut go down to the DMV together and transfer it over? If that is the case is there any fees for transfering titles?

*Okay, I think those are all my questions. If you can help answer any of them it would be great. Thanks in advance

-Eugene

*EDIT - I am from Southern California

 

Most of those questions are going to be dependent upon what state you live in. Where are you located so someone in your area can address your questions? Also, you can call the DMV offices and ask them most of the questions regarding fees, taxes, process, etc.

As for getting a loan without telling them it is for a car, yes you can, but I would think being an unsecured loan you would get a higher interest rate than you would with a car loan.

 

Thanks for the 2 cents. I really appreciate any repsonse as most of you guys are much older than I am (20)

 

1. False - you will pay taxes on a private purchase, you will pay this when you go to the DMV. Only way around this is if the car you buy is within the family and you can prove it if audited by the DMV.

2. False - you might be mixing things up here. The seller might have to pay taxes if he/she shows profit on the sale... which nobody really does that.

3. False - as I said... they dont need to show any of it in which ever way you pay. I would advice to stick to a banker check when making payments, its quicker and you will have traceability. Many sellers prefer this type of a check.

4. False - If you are going to get a bank loan on an AUTO... you will need to provide details of the car and the bank will hold the title until all payments are paid off on the loan. If you use the bank to take a loan not specific to an auto then you will end of paying a very high interest rate... like a personal loan... its not worth it... stick with the auto loan from a bank or a credit union, it will be cheaper.

5. True... you can both go over to the DMV with the title and transfer it from the sellers name to your name... and YES you will have to incur the fees, registration fees and sales tax... this can vary from state to state... but for example... if the car costs $10,000 and the state tax is 7% then you will have to pay the 7% sales tax and the registration fees (usually around $50 or so). So carry your check book with you to the DMV.

Hope that helps.

 

coolnesh - thanks so much for your reply I really appreciate it.

If anyone else has any advice they can give me that would be greatly appreciated as well.