Flipping Cars

 

5 Important FACTS You Need to Know About Flipping Cars

1. Flipping cars is illegal!

2. It’s a violation of your state laws

3. It can include possible federal and state tax fraud!

4. It may have heavy fines or jail time associated with it!

5. Flipping cars could stop you from ever getting a dealer license

Don Massey

Don Massey
A Colorado Dealer

 

I hope I have your attention.  I’ll explain the 5 facts about flipping cars!

But first, let’s define what “flipping cars” means.

The agreed on general definition is to buy and sell cars without a dealer license.  Another name for it in the auto industry is curbstoning.  This comes from the fact that individuals who want to sell a car usually park it at the curb with a for sale sign in the window.

The California DMV says…. Curbstoning is the repeated, unlicensed “flipping cars” for profit.  Curbstoners are people who actively and regularly buy and sell vehicles without a license, proper permits or a legally established place of business and who, many times, represent themselves as private sellers in order to attract buyers.

So on to the 5 facts….

Flipping cars is illegal!

To buy and sell cars, for profit, without a dealer license, is illegal in EVERY state.  Some states MAY allow a minimum of sales without a license.  This is usually 3-6.  Check your state’s requirements.  Many states set the number at absolute ZERO (California).  Don’t blindly follow what you read on the Internet blogs and forums.

As an example here is what Georgia’s FAQ website states:

I thought I could sell up to five vehicles in a year before I had to be licensed?

The “five cars per year” statement has been misinterpreted by many people.  The origin of the “five car” phrase is the Used Motor Vehicle Dealers’ and Used Motor Vehicle Parts Dealers’ Registration Act.  O.C.G.A. 43-47-2 (17)(A) states that “…the sale of five or more used motor vehicles in any one calendar year shall be prima-facie evidence that a person is engaged in the business of selling used motor vehicles.”  This means that evidence indicating that a person has sold five or more used motor vehicles in any one calendar year can be used to show that the person is engaged in the unlicensed practice of used motor vehicle sales.  This statement should be read in its context, and should not be misinterpreted to mean that a person may sell up to five vehicles in a year before becoming licensed.

It’s a violation of your state laws!

The auto industry is one of most regulated industries.  Both in manufacturing and sales.  Why the sales side regulations?  A car is the second most expensive purchase a consumer makes.  A home being the most expensive.

To protect consumers from being ripped off, states have passed dealer licensing regulations and rules.

The states have inspectors to monitor curbstoners.  They track by title transfers using names and addresses in the state DMV database.  They check Craigslist for repeated sales by individuals.

Watch this video.  It’s a California state investigator speaking.  He reflects the attitude of other state’s investigators about car flippers.

If you’re selling cars, as a business for profit, without a license (flipping cars), your state considers you a curbstoner and will take legal action against you.

It can include possible federal and state tax fraud!

Some car flippers will slip a title or use an “open title”.  This means they never register the car in their name.  They leave the buyers info on the title blank so they can fill in the name of the person they resell it to.

When a car flipper buys a car he is the new legal owner.  EVERY state requires the flipped car owner to register the vehicle, obtain a new title and pay fees and taxes.  To not do this is tax evasion.

When an invidual or business sells vehicles for profit they must also pay state and federal income taxes on their profits.  To not do this is tax evasion.

It can have heavy fines or jail time associated with it!

Flipping cars can get you in legal trouble.Here’s Georgia’s statute  (O.C.G.A. § 40-2-39.1 – GEORGIA CODE)

(g) Any person who violates this Code section shall be guilty of a misdemeanor and,upon conviction thereof, shall be subject to a fine not to exceed $1,000.00 for each violation or imprisonment for a period not to exceed 12 months, or both.

South Carolina law is:  If you operate as a dealer, wholesaler, auto auction, or transporter without the proper license, you may be convicted of a misdemeanor and fined up to:

1. $200 and/or imprisoned for up to 30 days for first offense.

2. $1,000 and/or imprisoned for up to six (6) months for second offense.

3. $10,000 and/or imprisoned for up to two (2) years for third and subsequent offenses.

ALL states have similar stautes, fines and possible imprisonment for violating dealer licensing laws.

So follow what the YouTube videos and “flipping cars for profit” web sites are saying and you could be toast!

Want more proof about jail time?  Click here!

Flipping cars for profit could stop you from ever getting a dealer license! 

Most states will deny an application for a dealer license if the applicant has been found guilty of past fraudulent actions concerning the sale or lease of motor vehicles.  As an example here is Arizona’s law.

An applicant convicted of fraud or an auto-related felony within the last ten years or any other type of felony within the last five years will have his or her license application denied.

 

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Comments

Flipping Cars — 68 Comments

    • Yogi
      There is only one alternative. Obtain a dealer license so you’ll not have to worry about buying and selling vehicles illegally. Plus you’ll have access to true wholesale priced vehicles at dealer only auctions. The best to you in your endeavors.
      Don

  1. Hey there, You’ve performed an incredible job. I will definitely digg it and in my view recommend to my friends. I am confident they will be benefited from this site.

    • Thanks for nice comment. Trying to help all understand the various issues about getting a dealer license.

  2. bought a car back in sept 2012 and i mailed off the title to DMV so I can register it in my name and my daughters name and we have been waiting for 10 months for some kind of information about what fees we will have to pay. It comes to this: This car was flipped, the guy we bought it from made it sound like it was his, and he said he paid for reregistration and smog. Well, I went to DMV yesterday and DMV couldn’t release any info on the car,because on the car the registration’s hasn’t been paid since 2011, thru 2013 and the guy told me that the car was smogged and it wasn’t. I just got the paper work today June 29, 2013. Where do I go from here?

    Debbie Richardson

    • Debbie

      What do you mean, you the paperwork today? What paperwork?

      So sorry to hear about your problem with a flipper. You are completely at the mercy of the DMV. I would go back to the DMV and escalate your issue to a supervisor. If you’re not happy with the answer he/she gives you then ask to speak to their superior. Just keep moving up through the ranks until you find the answer.

      As difficult as it may be, DO NOT get mad or verbally attack the each level of the bureaucrats. They only know how to talk in their language. Make a point that because of this flipper you have a vehicle that you can’t drive and just need it. Can they help. That’s all you want.

      If that gets nowhere ask them who or what government organization can you go to for help. This sounds like a violation of laws by the flipper. I might go to your local District Attorney’s office if the DMV is of no help.

      Again sorry, and good luck.

      Don

  3. I purchased a car off of craigslist for $1000.00. When I took the title to the BMV, I could not register it because it was under the company name where my signature had to go. Tried to contact the people and the lady offered to take the title back and fix it. She told me to meet her in the back of a hotel. My husband said no, because if she takes the title, I wouldn’t have a legal leg to stand on and I would never hear back from them. as it stands, I still Have yet to hear back from these people. Now what????

    • Lisa

      If I were you, I would consider asking for your money in exchange for the car and the title. Buying cars on Craigslist from individuals can be very problematic as you have found out. I’m sorry for your situation. I wish I had an easy answer.

      Don

  4. Could you provide more info on Flipping Cars – It’s Illegal in every state in conjunction with cars for sale by private owner? I don’t feel it is completely accurate.

    • Of course it’s not illegal for individuals to sell their private cars. That is a private transaction.

      Flipping cars is where an individual specifically purchases a vehicle for resale. That is a business transaction and is covered under the laws in a state regulating vehicle sales to the public. It is illegal to buy and sell cars for profit without a dealer license. Period.

  5. This year I have sold 5 vehicles. Recently I titled 2 one I did not get tags for, because it was intended to be a gift for my niece. She did not like the car so I sold it. But are you saying if I purchased a car and title it and pay the sales tax, the Motor Vehicle Board can’t say I am trying to buy and sell cars? I don’t buy and sell cars I just have sold a total of 5 cars this year to downsize. But thats legal?

    • Let me say it simply… If a person is buying and reselling vehicles for the purpose of making a profit, every state requires that person to be licensed as a dealer.

      That’s it. Nothing more. It’s easy to understand. A person knows why they are buying and selling cars. If it’s to make a profit then it requires licensing.

  6. Have you heard about the company Dealer Licensing Consulting? They are telling me that they charge me a monthly rate, which will allow me to buy and sell vehicles under their name, and then they 1099 me at year end… Is this legal?

    P.S. This is great info!

    • Nate

      It is legal when applied according to the laws in your state. Let me use my state as an example to decide whether this would be an option I would consider. Note this is called a “Shared dealer’s License Program”. I would NOT have a license. I am on the LLC and probably would be issued a 1099.

      The problem is NOT what they say is OK but what YOUR state says about the program. Pass it by your dealer licensing organization.

      As an example this program could put me in an illegal position with my state if I was not aware of the rules of the dealer licensing board in Colorado.

      Yes, I could go to auctions and purchase. Because I would be registered under the dealer license in the program. This is not a state or federal concern. This is a RULE that ALL auctions have. Why? Because they cannot sell to the public. Why? Because they don’t have a dealer licenses to sell to the public. So THEY, the auctions, require the DEALER license to screen out the public.

      So now I can go to the auction but…. in Colorado I can’t sell them under my name. I can’t sell them from my home. The cars I purchase would be assigned to the dealer in the program. I would have to keep the vehicle at the dealership and show it there and the actual transaction would have to take place at the dealership.

      So please CHECK with your state licensing organization before entering into any of these dealer programs.

      Thanks

      Don

  7. Don,

    I’ve been thinking of dealing cars in my home state, Tennessee. I’ve read the by-laws about doing so and you even mention the “5 car” mandate. What I’ve read is that if I go beyond the 5 car limit, that I have to have a lot that fits so many cars. Of course I want to get my license before I proceed, but is there anyway I can forgo having to pay for a lease on a lot? My hope was to sell 4 to 5 cars a month and use,for the most part, the auction as a resource. I simply want to sell them at a wholesale price and with an “it is what it is” mentality. Any advice?

    John

    • John

      Thanks for your question. If you review the requirements for a license in your state, you’ll find it does not say you have to a “lot”. It states requirements for your business location but think out of the box. Find a cheap location that meets the requirements, not what you think a car lot should look like. I would consider a co-location with another business. I have a friend who is co-located with a garage and a barber shop! It’s a business location that meets the requirements of the Colorado dealer licensing board which are much like Tennessee’s. Not beautiful but it works.

      I know of another dealer located in a commercial storage unit location. The difference is, the doors are garage doors, a 20×40 interior space and public restrooms.

      Again, search for places that meet the requirements, not your preconceived notion of a car lot.

      I cover this and more in my resources.

      Don

  8. I have been a victim of having a vehicle sold to me that was not in their name. It was advertised as clean title and once funds were sent (from Europe, my home) and I received a copy of the title it showed a different name. They purchased the vehicle in 07 it’s now 2013. The shipping company will not ship the vehicle as laws state for customs that it must be in the sellers name . I doubt they will change the title or refund me. Help! Who do I go to? I have names addresses and phone numbers and a Facebook contact for one of them. Advice appreciated

    • Car Flipping Guy

      If the intent of buying the car was to resell the car at a profit then the buyer is in the business of buying and selling cars for profit which requires a license.

      Don

  9. Please help me out. My friend sold her used jeep with a blown head to a young girl who said her dad was going to fix the car the head was not a problem. A couple weeks later she got court paper some guy is claiming she sold him the car. He wants the money back he claimed to have paid for the car. Arizona does not require information on the buyer, just the registered owner. The girl told the man she was my friends daughter and was selling the car on her behalf. MVD issued a notarized title with the purchasers name blank and the selling price blank. three days later the car was sold and the notarized title and bill of sale had all the blanks filled in. Please help. She just wants this guy to go away. He was scammed but not by her.
    Thank you.
    Lynn

    • Lynn

      The back of the Arizona title is to filled by the SELLER to transfer ownership. There IS a buyer’s section and a seller’s section both to be filled put by the SELLER. If your friend did not put the name and address of the young girl she sold it to then SHE created the opportunity for the “flipper” to sell the car without registering it. I’m sorry I don’t have any advice except for talk to the DMV. Bases on what you’re saying, your friend did not complete the transaction according to your state regulations and that’s why the guy thinks your friend sold him the car.

      Don

  10. Hi Don, I am based in north VA and I am intending to start this kind of business. I thought about getting a dealership license sinec I look to my stuff to be legal all times. the only thing that bothers me in the equation is the BOND.. I understand it as to freez 25,000 for 3 years. with this amount of money I can sell and buy lots of vechiles in three years. the other thing is to pay for the rent of you intended location for at least 3 to 4 months before have your license… this is along time to get into bsuiness. is there any kind of tools to expediate this?

    Thanks for the information presnted in your add here.. it was really helpful..

  11. I just bought a used car from a private seller and we realized after the fact that it was flipped. The owner(of 3 weeks) lied about everything. You mentioned Georgia’s statute and South Carolina laws concerning this crime, could you help me find if Utah has a similar law or statute? We are trying to figure out what to do. Thank you

    • Shellie
      Without knowing all the details I can only recommend you contact the Utah Motor Vehicle Enforcement Commission and file a complaint. Their telephone number is 801-297-2600.
      Sorry to hear about your problem. Good luck in getting it resolved.
      Don

  12. At the end of the year do you have to report the profit you made to the IRS then pay taxes on all of it or do you just have to change the title over?

    • Skyler

      I don’t quite understand your question. You buy a car and sell it for profit, then you owe the IRS taxes. You buy a car and don’t sell it, then you owe no taxes. A part of the selling process is signing the title over to the new owner.

      Don

  13. So I’m confused is buying and selling excessive amounts of used cars throughout the calendar year with the intentions of making large tax free profits illegal?

    • Dave

      If you are selling cars for profit then you are operating a business. Your business must meet the statutes for your business in your state. As a business you are to be licensed in your state, county and city. And as with any business you are responsible for reporting income to the IRS and paying applicable taxes.

      Let me put your question in a different format. “So I’m confused is buying and selling houses throughout the calendar year with the intentions of making large tax free profits illegal”?

  14. I bought a truck a truck from a flipper, they covered up the frame with bando and painted it so the buyer won’t see that it is completely rusted. Now he wont take it back, what can I do about? This is in Illinois.

    • Ruben

      There is not a lot you can do about the truck or getting your money back. When anyone buys a vehicle it is sold and bought as-is. That’s why it’s important to have a vehicle checked before purchase or buy from a business or someone you trust.

      If you’re for sure this person is a flipper you can report him to the State of Illinois dealer licensing in Springfield at 217-782-7817.

      Don

  15. I would like to get in the business of flipping cars legally. I heard that rather than getting a dealer license, you could register as a agent of a dealer. Could you explain how that works? Are there any pitfalls to becoming an agent instead of getting a full blown dealer license?

    • Ed

      There is no such thing an “agent” of a dealer. Go into any dealer and ask to be an agent for them. No, please don’t. Dealer’s have owners and employees. No one “agents” for them. A sales person is as close as you’ll get to being an agent for a dealer.

      There is so much mis-information on the Internet about selling cars, agents, flipping cars, renting a license. You have mis-informed folks on forums, chat groups and on Ask.com, Yahoo questions etc etc just adding to the “noise”.

      Read all the pages on this site to see some of that mis-information and how it affected folks.

      There is no half-blown license to buy and sell cars. If you want to sell cars to the public you must be licensed in YOUR state, not another state 500 miles away. You can’t be an agent. No dealer would jeopardize his license to put an inexperienced person on his license. Plus it would take approval by the state, insurances and bonds would all have be changed. When a person is on a license they are the OWNER(s) of the license and the business and liable for all.

      Now…. is it an impossible thing to obtain a license? No, it is possible, with guidance, to obtain a license with the minimum requirements. And that’s what my eBooks are about. Learn from a licensed dealer, not from Ask.com or someone “selling” you a several hundred dollar package or monthly fee.

      There are guys who have invested in my resources and got their licenses (see testimonials) and to be honest, most say, no way. So are you a risk taker or curious? They’re $27 and you get FREE consulting. Why FREE, read the FREE consulting page.

      Good luck in your search.

      Don

    • Hey… Roger!

      It’s me THE Don Massey but not THAT Don Massey! You’re funny, Roger. For others reading this…. Don Massey owned several Cadillac stores around the country. He was headquartered in Plymouth, MI. He built stores all over the country. At the end of the last century his annual says were almost a billion dollars. He died at 83 in 2011. He was fondly called, “Mr Cadillac”.

      So that’s it.

      Don Massey

  16. I’m asking on behalf of a friend who has sold about 100 cars each in Washington State, Arizona, and Michigan over the past many years, and now wants to clear up the mess he’s in (for illegally selling cars, not paying taxes, etc.). What does he need to do to settle these problems with the right authorities?

    • Seattle Rain

      I’m sorry I can’t give you the answers since it’s in 3 states. I would find a good tax attorney for advice. Taxes would be my primary concern.

      People reading this post can see how “flipping cars” is a business with license with tax consequences.

      Don

  17. Hey Don,

    I’d like to get a dealers license so I can “flip” cars, but here in Utah you need a designated area for advertising, a 24 square foot sign and $75,000 bond. Is there something I’m missing? I don’t want to make this a full time business, there’s enough bad dealers around here, I just want to buy cars cheap, fix them and resell them without any troubles.

    Thanks,
    Quinn

    • Quinn

      Yes, you must have a business location. You can find an inexpensive one ($300-$400) a month on Craigslist. You can co-locate with another business such as a mechanic’s garage as long as you have your own business area (office) with an outside entrance. A 24 foot square sign is a 4X6 piece of plywood with your business name painted on it. My $50,000 bond costs me $375 a year.

      I go into all these choices and alternatives in the e-book. Most guys interpret the state statutes as “I must have a lot”. There is no mention of a car lot in the Utah rules. I show you how to think out of the box.

      I have an acquaintance who rents a commercial storage building that meets the definitions as you noted for Utah. How about parking for three cars? He parks them inside! There is no state that rules that vehicles must be parked on an outdoor “lot”. Thinking out of the box. Fulfill the requirements, don’t build a car dealership as you see in your mind’s eye.

      And I could go on and on and on… it’s all in the book(s).

      As I read the requirements in Utah, you can easily do what you want to do.

      Good Luck

      Don

    • Rober

      You do not need a lot as you are envisioning it in your mind. Here’s what the State of Arizona requires for business location:

      “Established place of business must be a permanent enclosed building or structure, owned either in fee or leased, with sufficient space to display two or more vehicles of a kind and type that the dealer is licensed to sell. The established place of business must be devoted principally to the business of a dealer.

      A used motor vehicle dealer, public consignment auction dealer or automotive recycler may use a trailer as an office.

      A wholesale motor vehicle dealer may operate from a location zoned for residential use. Applicants should contact their local city or county office to ensure compliance with local zoning ordinances”

      You need to find a place that meets the requirements. It does say you need a lot. Example, couldn’t the spaces be inside. I see places for rent on Craigslist everyday that meet these requirements and they don’t look like “car lots”.

      Don

  18. It’s such a catch 22. You have to be rich to get a dealers license really. That’s not free market economics. They want you to have a lot with a restroom and all of that before you get your license. They have to inspect the dealer lot as well first. Then you can apply for the license. So you have to jump through a bunch of hoops to get it but to get it you have to make money first but you can’t make money without the license to afford a lot. Catch 22.

    • Steamer Steve

      I have to kindly disagree with you. You’re seeing only roadblocks. In my ebooks I show examples of overcoming them. I show you that you don’t need a “lot”. You need to have a business locations that meets the requirements of your state. I know of a dealer whose “lot” is a commercial storage building for small businesses and contractors. It looks like the storage rooms you see for individuals except they are 20X40 with large roll doors on each end to drive vehicles into. They have shared restrooms. His parking spaces are inside the building. He pays $400 a month. You just sign a lease for your “lot” with the option, it is valid only after you receive approval for your license. You do not have to be “rich”. You don’t need any more money than you’d have to pay for your first car whether you have a license or not (flipping cars).

      How about co-locating? I have an acquaintance whose “lot” is with a local mechanic’s business.

      I have a wholesale license which I can operate in my home. This is an optional dealer license I explain in the eBooks.

      Good luck…

      Don

  19. Just a comment. If someone has been a victim of a curbstoner and can’t get satisfaction from the seller, they should contact their local DMV to file a complaint and get help from their local investigations unit. It will probably require legwork by the buyer and fees.

  20. Great subject! Here in NJ , the state doesn’t take any actions at all. On Craigslist 90% of sales are title flipping. We , legal car dealers, pay for rent, insurance , bond and our taxes but seems they do better us since pay no expenses like we do .

    • Junior

      Thanks for comment. You can’t believe the number of negative comments I get that you are the bad guys along with the government. The “victim” complex in our society is so sad. They don’t realize the average dealer is the small independent lot working hard to make it everyday. Started by a person who never saw themselves as victims but worked to be successful.

      Don

      Don

  21. Sir, do i need to have a dealer license of i buy car from you and sell it to Europe without bringing it back home?
    Its about classic car! And also if i sell the car directly to the buyer overseas from the previous owner how do I need dealership place of i don’t have any cars at my state?
    Thanks
    Ivan

    • Ivan

      Based on the short amount of info you provide, no you don’t need a dealer license. If you buy a car however as an individual, you must register and title it and pay fees and taxes. You need that title in your name to for US customs to approve the shipment. That takes some time, so I don’t know what you mean by not bringing it back home. You’ll have to have it on your personal auto insurance, also. They will usually want to see the vehicle. When you get the title, you can sell the car to a foreign buyer easily. If you have any problems it will be with the country you are exporting the auto into. Most countries have some restrictions on imported cars.

      If you are going to do several of these transactions a year, you need to contact your DMV to see if requires you to be licensed as a dealer. States require licensing for companies doing US transactions only but you need to check. Rules regarding vehicle dealers are modified or changed every year in every state.

      Don

  22. If a person has a felony in the past, how much time must pass before they can get a dealers license? It was not fraud or vehicle related.

    • Anna

      Sorry, I can’t answer that. Every state has licensing rules for that situation. Contact your DMV dealer licensing group for an answer.

      Don

  23. Etse

    You cannot RENT a license. The companies that sell “get you a license” for a monthly fee are pairing you up with a licensed dealer.

    What this dealer will do for you depends on the dealer. I’ve seen some just put you on the auction list and that’s it. Other’s register you as a salesman. some add you to their LLC.

    First caution…. the dealer you pair up with MUST be in your state. Why? Because you cannot sell cars located in your state with another state’s license. North Carolina regulations frown on that. Everyone asks; then how do they sell on the Internet. Internet dealer car sales are made at the dealership. They don’t sell ON the Internet. They ADVERTISE on the Internet. They show and sell AT THE DEALERSHIP. If someone decides they want the car sight unseen from a distant location, the the paperwork is done AT THE DEALERSHIP and sent by overnight FEDEX. After signed documents and payment is received by the dealer, the vehicle is shipped to the buyer.

    Second…. If you have a dealer’s license or are on another’s license, you cannot sell cars from your residence. The transaction must take place at the dealer’s physical location.

    If you are legally licensed as a dealer in your state you can find cars for buyers. Dealers do this everyday. A broker ONLY finds cars and the sale is made by the dealer that negotiated the best deal with the broker. The buyer pays the broker a commission. I know of “brokers” that have dealer licenses but all they do is brokering.

    When you as a dealer or a registered rep buy a car at auction, the title is assigned to the dealer. Note: If one of these “dealers’ you sign up with gives you access to auction, you are not bidding in your name. You are bidding with the account set up by the dealer. So the auction will not do title transfer work to an individual. Title assignment and title transfer are two different title processes.

    Before you sign up for ANY dealer licensing program make sure you understand the laws and statutes IN YOUR STATE. Since you will be selling vehicles in your state, you must not be in violation of its statutes.

    Why not explore getting the license on your own? My resources show you how.

    Don

  24. We have the other end of the problem. We sold our car in Seattle in March 2014 before we moved to Japan (long term). The buyer never registered our car and we continue to receive tickets, fines, etc and even from collector’s agent. Every time we call the municipal court, they would clear our name but the problem continues. What can we do? Thanks.

    • Amy

      Sorry to hear about your problems. If you have friends in Washington I would ask them to contact the title division of the DMV and ask how does a owner remove his information from the title records. They can also call the vehicle licensing department and ask how to have your information removed from the license info on file in the DMV database. Of course your friends should explain why this needs to done and what paperwork is required from you. Hope this helps.

      Don

  25. I recently (days ago) sold my truck to a buyer who fits the profile of a curbstoner. He listed it for sale in online classifieds the same day I sold it to him and he is making claims about it that I know to be false). Like an idiot, I didn’t make sure the Bill of Sale/Title was properly filled out when I made the sale. Assuming he finds a buyer, that sale would show me as the seller and I can see potential problems for me arising such as traffic violations, bad sell claims, etc. similar to others’ posts. How do you suggest I go about protecting myself and potential buyers?

    • Miles

      Sorry to hear about your situation. Anyone selling a car, as an individual, should check with their DMV to check the paperwork requirements. You have an option you can explore.
      It’s called a “Release of Liability” or “Notice of Transfer” form. It is a notice to the DMV you have sold a vehicle and this is to formally inform them you are longer liable for any issues after the sale. Some states require the form to be submitted upon a sale by an individual. Many do not but it may be an option you can exercise. Check with your DMV.

      Don

  26. So let me get this straight. I can buy a vehicle today, title and register it in GA, sell it next week, claim any net as income and Im good. But if I decide to sell my personally owned, legally registered property 5 times in a calandar year in GA, then I broke the law? That doesnt sound right to me. Private citizens must have the right to sell or otherwise do what they wish with their legally owned property without fear of retribution because “auto dealers” feel infringed upon. I can sell as many houses as I want in a year without a realtor or a realtors license as a private seller.. so the idea that a vehicle is your second largest investment and buyers need protection is bunk. I understand the desire to protect buyers, but what about my rights? To get a dealers license in GA is a hefty monetary investment that dooesnt begin to be offset by the $1k-$2k one might profit by selling that 5th vehicle in a calendar year. That just doesnt sound right to me. Im not trying to take advantage of anyone but Im mechanically inclined and always looking for a good deal I can make a few bucks on… and I can do that 4 times in a year completely legally, but the 5th time earns me a fine and jail time. This seem ludicrous.

    • Will
      I completely understand your frustration BUT if you are buying and selling vehicles for profit the law is clear in Georgia when a license is required. Please don’t shot the messenger!
      Don

    • Seth
      Yes, eBay has a whole section dedicated to dealers on eBay Motors. The tool is called “Dealer Center”. On Craigslist, when you list a vehicle for sale you list is an an individual or dealer selling it. It’s interesting your dealership does not use these forms of selling on the Internet.
      Don

  27. i have a huge problem. I purchased two cars from some people in the state of Oklahoma, who I have realized are flippers. They go to sales and auctions and get repo’s stuff like that. I do not believe they have a dealers licence. They were unable to locate the titles to these cars. They gave me notorized bills of sales, which due to new laws in Oklahoma do me no good to obtain titles. I did obtain from tag agency information on the previous owners, which I’m trying to find to help. They agreed to trade the two cars I got for two they had the titles for, which they are now giving me the silent treatment and run around. One of the cars has an active lien on it from Georgia! How do I report these guys and get them shut down. What do I do?

    • Annette
      Sorry for your problem. You can report them to the Oklahoma Motor Vehicle Division at (405) 521-3600. The issue you have with these “flippers” or “curbstoners” in most states is not a criminal issue but a business dispute between the two of you i.e. a civil issue requiring lawyers! The buying and selling of cars without a license can be a criminal issue. That will have to be determined by your state’s licensing agency when they investigate your complaint.
      Don

  28. You can sell legal car without a license upto a certain amount (8 cars is my state limit) before having to get a license…then when over the state regulatrd limit is when you will get penalized…..what he is talking is giberish

    • Jason
      Thanks for your comment. You’re right about your state but not all states have that high a limit. At the 4:00 – 4:12 minute time in the video, I say you must not believe everything you hear or read on the Internet (including me) and to educate yourself by contacting your state dealer licensing board. In my state it is zero. Georgia is zero. California clearly states if you buy and sell cars for profit, the seller must be licensed. Many states it is 3 to 4. So the dream to have a part time business flipping cars is not viable in most states because of the few cars that can be turned in 12 months.
      I have found sites and forums on the net which recommend floating or having an open title. That’s where the flipper does not put his name or info on the title but waits until he sells the vehicle and then puts the next buyers name on the title. Then the flipper does not have to pay any state taxes or fees and there is no paper trail that he owned the car. I always ask these guys what do you do about insurance. They usually say nothing. So they are driving a car still titled to the original seller with no insurance. I have have talked to original owners who start receiving letters about past due traffic fines or accident claims because the title is still in their name. The new buyer just didn’t register it.
      I’ve seen flippers who put a lower price on the title than what they sold it for because it helps to reduce the fees and taxes. All the tiles I have seen, clearly say that it is a felony to sign it with false information.
      Flippers who ARE following state guidelines usually never report the income of their side business. The sad part of this, I’ve talked with guys who did NOT KNOW the legal aspects of flipping cars, got caught, were fined by their state and then had to pay IRS penalties on unreported income. And I’ve had many flippers to tell me %%$^@%#^ %%#^%$ and my wife, too. I just say, why not explore the possibility of being licensed. It’s not as hard as you read about on the net.
      Don

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