PA title for a wrecked vehicle

My friend just wrecked her truck. It looks worse than it actually is but she only has liability insurance. Basically she lost control in the rain, went off the road and the trees and one telephone pole did a cosmetic reconstruction on it. She had an estimate done and the only mechanical problems are a bent tie rod and a bent wheel. Instead of fixing it, she sold it to me cheap because she needed quick cash. The plan is for me to fix it, sell it, then give her the cash minus a little cash for my work. Just trying to help her get back on her feet and it will be nice to own a truck for a while. Clean title in her name.

So the only way I think PennDOT will believe that I bought the truck for $500 is if we show that its wrecked, but will they then issue an R title? There was no insurance claim so its not totalled.

Plan A was to just leave it in her name until we sell it, but since I will possibly hang on to it for a while I don't want to randomly drive a vehicle that is titled to her. Its best to just title it to me

Plan B was to transfer it to me with a realistic value, but then I would be paying $600 tax

Plan C is to record the actual selling price of $500, but they wouldn't believe it and it might get kicked back. My main concern is that they will require some sort of inspection and then require a reconstructed title.

How would you proceed?

Bill of sale is usually proof enough. Particularly if you get it notarized and/or also have a copy of a check.

Also, "doesn't run" or "won't start" are easy answers to why it's so cheap that won't throw up any inspection flags.

Does it matter if they believe it if it is true?

Notarized bill of sale, signed affidavit from the seller, whatever.

Seems to me the worst they can do is charge you sales tax for the book resale value.

Do they really have a law that says, "If we don't believe you, we get to order an inspection"?

What if it was your sister who just wanted to be nice?

I don't think it is the state's job to total a vehicle. It is the insurance company's job to total it, then report the fact that it has been totaled to the state.

SVreX wrote: Does it matter if they believe it if it is true?

This is PA... I'm not sure if the actual law comes into play as much as "Jesus wants you to pay taxes" comes into play.

Seems to me the worst they can do is charge you sales tax for the book resale value.

Problem is, book resale value is $9000 or more. It would suck to pay $600 tax on a $500 purchase. I don't know exactly what the provisions are for them to deny an application for title, I just know that they frequently do deny title transfers on a high percentage of anything they don't think jives.

Do they really have a law that says, "If we don't believe you, we get to order an inspection"?

Having just recently moved back to PA and discovering some fresh new laws, I'm not sure.

What if it was your sister who just wanted to be nice?

There is a provision for a "gift" vehicle. In the past it was a plausible way to get out of paying taxes... which is why it is much more strict now. If I'm reading the law correctly, she has to actually be a sister, parent, offspring... some kind of direct relation. I have to sign a legal affidavit saying she is my sister. I'm not exactly a conformist, but I'm not really cool with defrauding the state and lying.

I don't think it is the state's job to total a vehicle. It is the insurance company's job to total it, then report the fact that it has been totaled to the state.

Agreed, but I've seen some wacko state stuff before in other places I've lived.

PA originally declined my out-of-state purchase of a trailer. The trailer title said the name of a corporation. The guy who signed the title was the Equipment Acquisitions Manager. PA kicked it back and said that I had to get proof of his POA granted to him by the corporation to sign the title. Imagine that phone call:

"Hello Mr. Equipment Manager, my name is Curtis. About a year ago I purchased a used trailer from your corporation's branch office in TX which bears your signature on the TX title from your office in Virginia. Could you please fax me your corporate Power of Attorney even though neither VA or TX require it for you to sign the title? If not, I can fax you a PA power of attorney form to sign and fax back." Yeah, that would have gone over well.

Funny ending to the story.... The corporation from which I bought the trailer was Brickman Landscaping Group LLC. There was a spot on the title for "signature of co-owner." I signed that box "James A Brickman." It went through just fine the second time.

SVreX wrote: Notarized bill of sale, signed affidavit from the seller, whatever.

PA doesn't require a bill of sale. The notary doing the transfer simply asks what the purchase price is. Once they submit it to the DOT, its up to the DOT agent to make a determination on what is kosher and what isn't.

PA is pretty big on "if this, then this." By that, I mean I could have a cancelled check to show them the truth of what I paid, a signed and notarized bill of sale, and the Pope's blessing, and it won't make a difference.

I called AAA today. Both people I talked to treated me like, "yeah, how much are you really trying to lie?"

if she's trustworthy, just leave it in her name until it's sold. you are just a mechanic that's fixing it for her...

the less you tell the state, the better..

also, why pay them any taxes that you don't need to by transferring it and then transferring it again when it's sold?

There may be another option...

I used to buy parts cars that were 'normal' vehicles with regular titles. What I'd do is what the dealers do; just transfer the title to my name but without paying taxes. This (used to) get you a title that showed ownership, but you couldn't get registration/tags for it until the taxes were paid, which wasn't an issue if you just got it to resell. I don't know if you can still do that, as it's been years since I've bought a car to flip.

The other option is to make up a somewhat higher price ($2500), say it doesn't run, and just pay the taxes on that amount. I think you could also just state the truth, that it's wrecked. Total loss/salvage title really only comes into play when an insurance company declares it as such. Private individuals are not qualified to determine total loss or not, so there isn't really a law that applies to them for something like this.

Another idea: for your protection, you could leave the title in her name but assign a lien against it to you. That makes you co-owner (as if you were giving her a loan, which you are in a way) and you can "release" the lien when it gets sold.

Another option would be to straight flip it as it sits. You can probably sell it with the rim and tie rod fixed for a good profit, even with the dent damage.

SVreX wrote: I don't think it is the state's job to total a vehicle. It is the insurance company's job to total it, then report the fact that it has been totaled to the state.

with only liability ins ... the Ins co. wouldn't get involved ... they'd never know if the truck was wrecked or not

novaderrik wrote: if she's trustworthy, just leave it in her name until it's sold. you are just a mechanic that's fixing it for her... the less you tell the state, the better.. also, why pay them any taxes that you don't need to by transferring it and then transferring it again when it's sold?

this ..... as long as you have permission from her to drive it, I don't see the problem of leaving it in her name ... even if you wrecked it yourself ... you'd be the one responsible .... question.. does it have to be in your name for you to provide the ins on it ?

In reply to novaderrik:

I agree with this as well.

Is the plan to fix and flip? Don't transfer the title. Lend her $500, fix it and then sell it, letting her sign the title over. Get your $500+ back and use the proceeds to buy a clean truck.

Otherwise, I'm not 100% convinced PennDOT will care or pay attention that closely. Taxes are collected by the tag place and it seems some will question it and some won't. The place I go to has never questioned any "sale price" I've given them regardless of the car. The tag place where we transferred the title for my E30 did. Either way, I've never gotten anything from PennDOT about it.

Lifelong PA resident. I have bought and sold MANY a vehicle for $1 without raising and eyebrow. It's a gift, or in exchange for labor, or it needs work...no one has ever questioned it. Go to AAA, do the paperwork, if you are nervous, claim $500. Legally, a parent can transfer a title to their kid for $1. Heck, I transferred my house (sole ownership) to my wife (co-ownership) for $1.

In the last few years PA has been a little pickier about title work on cheap vehicles changing hands.

When the vehicle is being sold for significantly less than average market value, there's an extra form to fill out stating why the price is so cheap. "Vehicle is wrecked, not drivable" is acceptable for that. If you are doing a title transfer only (not going to tag it at the same time), I suspect that will raise less scrutiny.

i wouldn't use the word wrecked, but i would use the words "needs significant mechanical repair"

curtis73 wrote: Problem is, book resale value is $9000 or more. It would suck to pay $600 tax on a $500 purchase.

You could look at it that way, or you could decide to appreciate how nice it is to get a $9000 vehicle for $1100.

If they ding you, I guarantee there is an appeals process. I just appealed taxes on the purchase of my MINI, which the state said was worth $8500, but I (legitimately) paid $1500. It took a while, but I got my money back.

First, don't go to AAA. I've found them to be the most difficult to work with even on some of my most straight forward deals. Seriously. If the THINK something is strange they will balk. Especially if you are going to the one I think you are going to.

Second, as people mentioned you can just say it's in poor condition and if you go to any place outside of AAA it will be fine. I can even give you a couple of places that I've had stuff done at and that know what they are talking about.

You don't need to be related for a gift, a friend is fine. I just gave a trailer to someone and also have had friends give me cars. Never a problem. Just don't go to AAA.

Weird man, I have never filled out a form or been questioned or hassled by AAA. I guess it's where you live.

ddavidv wrote: Another idea: for your protection, you could leave the title in her name but assign a lien against it to you. That makes you co-owner (as if you were giving her a loan, which you are in a way) and you can "release" the lien when it gets sold.

Doesn't that come with its own set of fees and redtape?

wbjones wrote: this ..... as long as you have permission from her to drive it, I don't see the problem of leaving it in her name ... even if you wrecked it yourself ... you'd be the one responsible .... question.. does it have to be in your name for you to provide the ins on it ?

No. I can insure it in my name regardless of the titled name. I trust this lady implicitly. She's a close and trusted friend, but she has a dotted legal past due to a past abusive/druggie spouse who tends to show up and stir the pot every once in a while. For that reason I want all the "I"s dotted and "T"s crossed.... and to her credit she insists on the same because she values our friendship.

novaderrik wrote: if she's trustworthy, just leave it in her name until it's sold. you are just a mechanic that's fixing it for her... the less you tell the state, the better..

I agree, but I also want to protect both of us and do it "right." I spent a fair amount of time in my life with questionable titles, finding ways to make junk legal, etc. When I have the opportunity to get a clean title in my name I don't want to pass it up.

also, why pay them any taxes that you don't need to by transferring it and then transferring it again when it's sold?

I don't mind paying sales tax on it since I only paid $500 for it.

I am finding this somewhat ironic: In the past I have done some transfers that were perfectly moral, but required some creative trickery. Now I'm doing this one and its all 100% on the level but I'm afraid they'll kick it back

Ian F wrote: In reply to novaderrik: I agree with this as well. Is the plan to fix and flip? Don't transfer the title. Lend her $500, fix it and then sell it, letting her sign the title over. Get your $500+ back and use the proceeds to buy a clean truck.

Great idea, but it would most likely cost us resale value. PA requires buyer and seller to be present at a notary. Because of that, most buyers find it really shady if I "sell it for my friend." The other probability is that I may drive it for a few months to do some "truck things" up at camp and take advantage of the 4x4.

I think the running theme here is: Yes I trust my friend but for the sake of our friendship and her ex being a douche, (and since I may keep it for a little while) we have decided to transfer the title.

Original post you said it has a clean title. Why do you keep saying rebuilt title? Just transfer it to your name. Put in a value that the state will question less, and pay the taxes on it.

In reply to pinchvalve:

I mean, we are probably real close to each other and I've had issues with completely legit deals at more than one location - primarily east and north locations (North Hills I'm 50 - 50 on, Butler 50-50, struck out at Monroeville and East Liberty). I've even been a member for 12 years. The last time they were giving me grief I walked out and I went to the local notary across the street from AAA and was done in 5 minutes. Love them for every other service, just dealing with titles I go elsewhere and never run in to problems.

clownkiller wrote: Original post you said it has a clean title. Why do you keep saying rebuilt title? Just transfer it to your name. Put in a value that the state will question less, and pay the taxes on it.

this! Make it a 3 grand sale price and pay the taxes on it. Everybody wins