is bill of sale needed for trades?

[woodysmom]

Hey guys,
i'm about to engage in a car -> car trade. What legally happens in this scenario? Do I buy his car and he buys mine? Does that mean i have to pay sales tax in my respected state for the sale of my car and the purchase of his car? Does it make any difference that we do not reside in the same state?

Has anyone drafted a contract that may be applicable in this type of situation that i can use as a template?

Thanks

[FRpilot]

come on poeple.. theres gotta be a lawyer on zilvia..

[infinitexsound]

trade slips as gifts, and write out a contract make 2 copies and sign over..... thats how i would do it... or sell the car a 100 bucks to each person... what ever works... doesnt seem that hard....

[aznpoopy]

come on poeple.. theres gotta be a lawyer on zilvia..

haha...

i'm going to law school in the fall. maybe i'll know the *real* answer to this after a year or two.

you guys could just value and sell each car for something stupid, like a dollar. then pay tax on that dollar at your DMV.

a contract should be pretty simple.

person A agrees to sell person B car 1 (vin) for x amount of money.
person B agrees to sell person A car 2 (vin) for x amount of money.

signature A
signature B
date

if you're really worried have each person bring a witness and have them sign the document as witnesses.

that way if theres any issue and it goes to small claims, you are both covered.

as far as the dmv is concerned, they should treat it like two seperate private sales. the dmv guy might give you a funny look when you say you bought it for a dollar. i don't see why that would be illegal though. there's no law saying you can't sell your car for a buck.

[woodysmom]

can you gift a car to anyone?

If i sell it for a dollar will that impact how it's valued by my insurance? By the DMV? By a bank if i were to refinance for the new car?

[jojothemonkey]

you might only need to do a title transfer go to the dmv webpage for your state http://www.dmv.org/, but you might want to write something up anyways just cover your butt.

[papershot]

a couple years ago I traded cars by selling each of them for a dollar. all I had to do was transfer titles. was able to get the car registered the day after I bought it and put the licence plate from my other car on it.

[woodysmom]

don't you have to declare the value of the car to DMV or INSURANCE? Will buying it for just a dollar affect how much your car is valued?

When you bought it did you use a bill of sale contract?

Thanks for the responses guys!

[Ritz S14]

Just google "Bill of sale". I did a bill of sale a few weeks ago when I sold a set of wheels.
Bill of Sale

*SAMPLE*

For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby sells and transfers to __________________________________________
the following:

__________________________________________________ ___________________

__________________________________________________ ___________________

The undersigned warrants and represents that it has good title to and full authority to sell and transfer the same and that the property is sold and transferred free and clear of all liens, claims and encumbrances except:

__________________________________________________ ___________________

__________________________________________________ ___________________

The undersigned warrants that, subject to the exceptions stated above, it will indemnify the Buyer, and defend title to the property, against the adverse claims of all persons.



_______ _________________________________
(Date) (Signature)

http://1040tools.com/nonprint/billsale.htm

[24Zero]

When a customer comes in to my dealership this is what I tell them to do:

Make a bill of sale for each vehicle for $100.00. Then take the titles to the title office have the titles transfered into the apporiate names and then go to the tag office and register an new tag (or transfer the current tag). You will only have to pay sales taxes on the amount of the bill of sale.

Hope that helps.

[aznpoopy]

don't you have to declare the value of the car to DMV or INSURANCE? Will buying it for just a dollar affect how much your car is valued?


i don't know about the DMV. i doubt it. i would think the DMV takes the value of the car into consideration only for the purpose of applying tax.

as for insurance, the payout for claiming with your insurer or against someone else's insurer will be determined purely by the *book* value of the car, not how much you paid for it in a private sale.