Buying a Car in private sale


#1

I see people stated that they had it as $1.



Would DMV is still ok if it states $1 as the price?



Any tips?


#2

DMV usually will use the Blue Book value to compute fees and taxes…Transfers between family members can usually escape taxes…If the car is over 10 years old, they will not argue with you too much about a low-ball bill of sale, especially if it includes a statement “Needs Engine Work”…


#3

The procedure varies from state to state, some use blue book values unless you have a professional appraisal or salvage title. Others will accept a notarized bill of sale, or the seller can be present. In my state transfers between family members are exempt. But I don’t think anyone will accept an arms length transaction at less that junk price.


#4

Just beware the taxman. You may get a letter a year or three down the road asking for either an affidavit as to whether that was the true purchase price or a check for the unpaid tax. I did and it was a hassle to get it straightened out. (I have no idea if they actually contact the seller as well)

You may be able to get away with knocking a little off the stated price, but I wouldn’t put down $1 if you paid $5000 for it, for example. (the ethics of such a thing aside)