Dealer Plates vs. MT Registration Clarification (Different Inquiry!)

Discussion in 'Ferrari Discussion (not model specific)' started by jpohl402, Dec 6, 2017 at 4:19 PM.

  1. jpohl402

    jpohl402 Formula Junior

    Hi all,
    There are already various threads on the subject, and I'm not going to debate MT registration - we all know the pros and cons of it. ;)
    However, DO have a question about something related to it!

    When discussing & exploring the subject of saving sales tax on exotics - it has been mentioned/some have thought: what about if you already are/or plan to become, a licensed car dealer??

    Let me present a scenario to you:

    For those in the know - How would this situation work??
    You ARE a dealer. You have dealer plates, of course. You want to buy (BUT FINANCE PART OF) a luxury or exotic car.
    You need to have a lender approve your creditworthiness, and put loan in YOUR OWN PERSONAL NAME.
    However, due to lien, you of course need full coverage insurance. Just like all your other personal vehicle policies, the insurance is in YOUR OWN PERSONAL NAME. Let’s just say your name is Joe Smith. So, you simply add “X” vehicle (let’s say it is a Veyron in this case) to your personal policy, insuring with comp & collision, etc. Good to go!! Now, Joe Smith has a loan IN HIS NAME for half the worth of this vehicle (Veyron), and Joe Smith also has comp & collision insurance IN HIS NAME for “X” vehicle (Veyron.)

    Lastly - registration. Joe Smith is the sole managing member of his dealer, say “ABC CARS LLC.” Auto Dealers can be issued a “TITLE ONLY/NO REGISTRATION” at DMV, avoiding sales tax & registration, but receiving no plates. Then, any auto dealer (in this case ABC CARS LLC), would own any vehicle that is “Titled Only” in the dealer name.

    Joe Smith decides he will use an ABC CARS LLC dealer plate to drive his Veyron around, and he is happy.
    So, Joe Smith gets a “Title Only” on “X” vehicle that he purchased above (Veyron!), and uses his dealer plate to drive the car.

    When Joe Smith and ABC CARS LLC got the “Title Only”, of course the electronic lien was notated (for the lienholder.) When said lienholder receives/looks at title of “X” (Veyron), they are going to see, and or previously know, three (3) things:

    1. JOE SMITH got a loan in his name for half the worth of his Veyron.
    2. JOE SMITH maintains and carries comp & collision insurance on the Veyron, per his state law, at the coverages reqd by insurance company. The Veyron is in addition to his Kia Optima (that his wife mostly drives), and his “other car” (say a Honda Accord). Three cars total on the personal policy. Note: the Optima and Accord are properly registered, taxes were paid & have regular plates - they don’t use dealer plates. Joe just didn’t want to pay tax on the Veyron! ;) *Second Note*: of course this is slightly simplified. You don't insure your Veyron with Geico, next to your Accord. You likely use a specialty company. But you get the point.*
    3. ABC CARS LLC, “owns” the Veyron - NOT Joe Smith, with whatever lienholder listed on there as well with ABC CARS LLC.

    So: What does the lienholder say about this slight discrepency (between loan/named insuranced/titled owner)????? No big deal???
     
  2. 360+Volt=Prius

    360+Volt=Prius Formula 3

    Sep 1, 2013
    1,050
    Western Mass
    Full Name:
    Raimondo
    Sorry I think I have ADD, to many words for me.


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  3. BMW.SauberF1Team

    BMW.SauberF1Team F1 World Champ

    Dec 4, 2004
    10,209
    FL/AL/DC
    I'm not sure you can have a car titled/plated as a dealer car, but then a private party has the insurance and loan in their name. That may apply to all states even though each state has different laws. I've looked into getting dealer plates in Florida and I don't believe you can do that there in that scenario. Buying and insuring the car entirely under the LLC entity and running dealer plates is the way it's done in FL.
     
  4. Texas Forever

    Texas Forever Two Time F1 World Champ
    Rossa Subscribed

    Apr 28, 2003
    25,322
    Texas!
    I think what you're talking about is called fraud. I doubt any insurance company would pay.
     
  5. LARRYH

    LARRYH F1 Rookie
    Rossa Subscribed Owner

    Jun 3, 2011
    3,816
    virginia usa
    If you are a dealer why not just finance it through the dealer line of credit and use d tags.
     
  6. Enzojr

    Enzojr F1 Veteran
    Silver Subscribed Rossa Subscribed

    Dec 12, 2013
    8,285
    West of PDX
    Full Name:
    Tomy
    Yea, you have enough going on here to keep at least 3 lawyers busy when this doesn’t work out.
    Somebody will pay, DONT be surprised if it is you ;)
     
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  8. 308 milano

    308 milano F1 Rookie
    Silver Subscribed

    Jan 15, 2007
    2,900
    Montana
    Full Name:
    Kim
    This ^^
    Had a dealers license for about 10 years. Lots of checks/balances in place. You're just asking for trouble.
     
    Texas Forever likes this.
  9. Nospinzone

    Nospinzone F1 Rookie

    Jul 1, 2013
    2,906
    MA
    Full Name:
    Paul
    Just roll the dice and register it in MT, what's the worst that could happen? :D
     
  10. bnels2348

    bnels2348 Karting

    Jul 26, 2006
    68
    South Valley, UT
    Full Name:
    B
    I’ve done this but the way it was explained here is overkill for the purpose of “inquiry”.
    You can do it but remember in some states there is enough overhead that paying taxes is more attractive and less expensive.


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  11. Andynyc

    Andynyc Rookie

    Apr 20, 2017
    17
    If you are going to buy the car as a dealer, and not register it and use dealer plates and insurance, then finance it as a dealer. If you need to finance.

    If you finance the car personally, then you will need to register and insurance in your own name.

    If you remove financing from the equation, then it’s much simpler just do mt registration .

    I am no expert, this is just my humble opinion. You should consult with an attorney and accountant before you do anything.
     

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