Selling a Car for a Relative - Any Gotchas?

As they're getting older, my parents have been talking about selling their '94 C4 Corvette (LT1, 6 speed manual) for a few years now.  They've owned it since 2003 or so, it has a clear title, and I believe they're the 2nd owners (they bought it from a dealer with 67k or so on it). In talking to them about it last night, I realized they don't want it sell it private party themselves, so they're basically asking me to sell it for them.  I'm happy to do that for them, I feel bad not realizing last year that the actual transaction was their biggest hang-up about selling it. They're about an hour away from me, so I'm trying to anticipate what things I'd need to line up so that if a buyer shows up with cash, I can make the purchase seamless.

We're in CT, I'm thinking if they filled out the seller's portion of the bill of sale, signed the bill of sale, and signed the back of the title, I'd be good to go.  Any other considerations I'm missing?

One thing that comes to mind, is that it could be a lot easier to get it sold if you list it here first. The forum is kind of self limiting in the idiot category.

Floating Doc (Forum Supporter) said:

One thing that comes to mind, is that it could be a lot easier to get it sold if you list it here first. The forum is kind of self limiting in the idiot category.

I'd prefer to sell it on here, but I'm trying to cover all of my bases :-)

As obtuse as it may be, it's easier to sell to you then you to sell it. Because the what if I would have is, as a buyer, is do you have the right to sell it. Even with a piece of paper signed and notarized, I'd be leery that I'm going to be taken. Anybody selling "for a relative/friend/", I pass on. Just food for thought.

I live in Ohio and I do not know about CT, but....  

Here there is such thing as a BMV Power of Attorney page.  With this page, and with the page notorized (per the Ohio requirments) I then have legal permission to sell a car that I do not own.  

As "the car guy" amongst friends, I have private party sold cars I do not own for friends and family who do not enjoy or know the car selling process.  

I recommend you ask CT's BMV or similar.  

Ranger50 said:

As obtuse as it may be, it's easier to sell to you then you to sell it. Because the what if I would have is, as a buyer, is do you have the right to sell it. Even with a piece of paper signed and notarized, I'd be leery that I'm going to be taken. Anybody selling "for a relative/friend/", I pass on. Just food for thought.

Great feedback, thank you! I'll definitely have to think this through a bit more.  My reasoning with not buying it was a hesitation to turn it from a two-owner car that had been owned by the prior (elderly) owner for 21 years, two a third owner who's flipping the car.  In addition, I'm not eager to pay the sales tax on it in order to register it, and with one (soon to be two) male teenage drivers on the insurance policy, I'm not looking forward to that bill while it's on my insurance.  If it's registered and insured in my name, I'll be more tempted to keep it, which I know is what my parents really want   If I had fewer teenagers on the policy and an extra garage bay, I would totally keep it.

Being they are your parents they can likely "gift" the car to you and therefore you will have no sales tax required to put the car in your name.  But, then with it in your name you'll need to get plates and insurance for the car, etc...hassle to you.  

The best part of the car is that it's been owned by the same responsible owners for 20 years.  If it were me, I would move their car to your house and post it up for sale.  In the ad I would highlight that you are selling this well cared-for car on behalf of your parents.  Test drives and shopping would be completed at your house.  If you do find an interested buyer, it would seem reasonable to me to ask that buyer to travel 1 hour to your parents location for sale completion, if they need to be present for the sale completion.  As a buyer, that would then give me closure that the "story" of "parent ownership" is real and genuine.  

dj06482 (Forum Supporter) said:

As they're getting older, my parents have been talking about selling their.......

At first I was expecting to read a Buick LeSabre or Toyota Camry........

Datsun240ZGuy said:

dj06482 (Forum Supporter) said:

As they're getting older, my parents have been talking about selling their.......

At first I was expecting to read a Buick LeSabre or Toyota Camry........

The good news is that they're keeping their '02 Mustang GT 5 speed. Ironically, the insurance on that is about double of what it is on the Corvette (because typical Mustang vs. Corvette owner stereotypes are somewhat true).  On the plus side, the Mustang is easier to get in/out of.

John Welsh said:

Being they are your parents they can likely "gift" the car to you and therefore you will have no sales tax required to put the car in your name.  But, then with it in your name you'll need to get plates and insurance for the car, etc...hassle to you.  

 

The best part of the car is that it's been owned by the same responsible owners for 20 years.  If it were me, I would move their car to your house and post it up for sale.  In the ad I would highlight that you are selling this well cared-for car on behalf of your parents.  Test drives and shopping would be completed at your house.  If you do find an interested buyer, it would seem reasonable to me to ask that buyer to travel 1 hour to your parents location for sale completion, if they need to be present for the sale completion.  As a buyer, that would then give me closure that the "story" of "parent ownership" is real and genuine.  

All of this

John Welsh said:

Being they are your parents they can likely "gift" the car to you and therefore you will have no sales tax required to put the car in your name. 

Unfortunately, CT takes their pound of flesh at "purchase" even if the car was a gift. They assess a 6.35% tax on 70% of the book value of that vehicle, regardless of what you paid for it.  So in this situation they could gift me the car, but I'd still have to pay sales tax on it.  It really stinks when you get buy a cheap car to fix up, as you get taxed on it as if it was in perfect shape.

Also, have a look at the physical title. Some states require a notary to transfer the title. 

Datsun240ZGuy said:

dj06482 (Forum Supporter) said:

As they're getting older, my parents have been talking about selling their.......

At first I was expecting to read a Buick LeSabre or Toyota Camry........

And yet there GRMers who would still be interested.

Appleseed said:

Datsun240ZGuy said:

dj06482 (Forum Supporter) said:

As they're getting older, my parents have been talking about selling their.......

At first I was expecting to read a Buick LeSabre or Toyota Camry........

And yet there GRMers who would still be interested.

I hear they make good swap donors

Had an odd gotcha get me when buying a C4 Corvette from a flipper who never titled it himself: If there's two names on the title, you need both people to sign the paperwork. At least here in Georgia.

AngryCorvair (Forum Supporter) said:

John Welsh said:

Being they are your parents they can likely "gift" the car to you and therefore you will have no sales tax required to put the car in your name.  But, then with it in your name you'll need to get plates and insurance for the car, etc...hassle to you.  

 

The best part of the car is that it's been owned by the same responsible owners for 20 years.  If it were me, I would move their car to your house and post it up for sale.  In the ad I would highlight that you are selling this well cared-for car on behalf of your parents.  Test drives and shopping would be completed at your house.  If you do find an interested buyer, it would seem reasonable to me to ask that buyer to travel 1 hour to your parents location for sale completion, if they need to be present for the sale completion.  As a buyer, that would then give me closure that the "story" of "parent ownership" is real and genuine.  

All of this

Yes, you're selling an enthusiast's car.  Not a boring car. 

Potential buyers will be  understanding, willing to go an extra step, and appreciate honesty.

I'd be a little concerned about having them sign the title prior to an actual sale, but as mentioned check the rules in your state for selling cars.

If they're an hour away, that means it would be a half hour drive for both of you to meet in the middle to sign papers.  I'd think the buyer should be able to put up with that much of a delay.

dj06482 (Forum Supporter) said:

John Welsh said:

Being they are your parents they can likely "gift" the car to you and therefore you will have no sales tax required to put the car in your name. 

Unfortunately, CT takes their pound of flesh at "purchase" even if the car was a gift. They assess a 6.35% tax on 70% of the book value of that vehicle, regardless of what you paid for it.  So in this situation they could gift me the car, but I'd still have to pay sales tax on it.  It really stinks when you get buy a cheap car to fix up, as you get taxed on it as if it was in perfect shape.

We have a similar scam run by the Ontario Gov, only its 13% tax on whatever they call. 

The weasel hole is to know an appraiser and have them put a sensible value on the car; the MTO will accept that number.

I donated an 11 year old Versa to my nephew and the MTO dinged him for a value of $5k. 

NOHOME said:

dj06482 (Forum Supporter) said:

John Welsh said:

Being they are your parents they can likely "gift" the car to you and therefore you will have no sales tax required to put the car in your name. 

Unfortunately, CT takes their pound of flesh at "purchase" even if the car was a gift. They assess a 6.35% tax on 70% of the book value of that vehicle, regardless of what you paid for it.  So in this situation they could gift me the car, but I'd still have to pay sales tax on it.  It really stinks when you get buy a cheap car to fix up, as you get taxed on it as if it was in perfect shape.

We have a similar scam run by the Ontario Gov, only its 13% tax on whatever they call. 

The weasel hole is to know an appraiser and have them put a sensible value on the car; the MTO will accept that number.

I donated an 11 year old Versa to my nephew and the MTO dinged him for a value of $5k. 

Ouch! Guess I should be thankful for only 6.35%!

Appreciate all the feedback, everyone! I like the idea that I should show the car halfway between my house and my parents so they're only half an hour away if the buyer is serious. I'll check the title to see if they are both in it (they typically title everything as "Or").

Do some research on title transfer requirements in the titled state.  In PA most notaries will not stamp it with only one name on the title.  There are exceptions but in PA they are breaking the law.  Regardless get a power of attorney, for a few bucks of notary fees it give you legal authority to sell.  The buyer will have the issue of handling with their state DMV not you.  But the buyer's state will submit the title and POA to the titled state for release.

The next question is usually payment.  Cash, bank check, etc.  

Easy button that always gets your answer - call the DMV or (if your state has them) a vehicle notary service.

Every state is different, but one thing is for sure - all names on the title must sign at the correct time.  In places like PA, that means in presence of a notary.  In TX, a notary wasn't required when I was there.  In CA, there was an additional part of the title that you ripped off and filled out as the seller to send in that relinquished your ownership, so the transfer had to be an active action from both parties.  If the titled owner(s) are not present, you'll need either a power of attorney proof or a death certificate along with a truckload of other paperwork that proves you're the executor.

As far as selling it out of state, it's on the buyer to do the same and know how to do it on their end.

I once sold a car (California) to a family friend.  She never titled it, then sold it again.  DMV notified me for some reason.  If your state has a form to notify DMV that the car has been sold, be sure to do that.

Geoffrey said:

I once sold a car (California) to a family friend.  She never titled it, then sold it again.  DMV notified me for some reason.  If your state has a form to notify DMV that the car has been sold, be sure to do that.

Yes!  I ended up kinda screwing a guy over because I was new to CA and didn't know this part.  He was getting rid of a step van with a lost title.  My plan was to snag the driveline and scrap the rust of it... I mean the rest of it... but some guy offered to trade me a yamaha dirt bike for it, so I made the trade.  Well, that guy ended up abandoning it in downtown L.A. and because I didn't do the correct transfer of ownership, the original guy started getting all kinds of fines and parking tickets.

We got it sorted.  He got the fines removed and I paid for the tow to a junkyard.

MadScientistMatt said:

Had an odd gotcha get me when buying a C4 Corvette from a flipper who never titled it himself: If there's two names on the title, you need both people to sign the paperwork. At least here in Georgia.

This usually depends on how the title is filled out.

Name and Name = two signatures.

Name or Name, either signature or both but only one is required. 

All of my vehicles are titled my wife or me as owner so she can dump them without going through probate when I kick the bucket.