Can You Flip Cars Without Registering Them?

One of the most common questions we get here at Exotic Car Hacks is some variation of “Can I flip the car without registering it?”

Most states won’t allow people to transfer titles from the previous owner to their buyer (also known as title jumping) without a dealer license, because you’re acting as a reseller, not a consumer.

Make sure to double-check with your individual state to see what the rules are, but in general, the answer is no.

At the end of the day, Exotic Car Hacks is about buying, driving, and enjoying exotic cars for personal use and then breaking even or making a small profit at the end.

In Exotic Car Hacks Part Deux, our higher-level course, I dig into how to set up a dealership so you can jump titles and eliminate your personal sales tax burden via that and other routes, however, you should absolutely go through the core training first.

In the case of needing to register a car for personal use, you’ll have to account for sales tax as a cost before selling.

That said, you don’t necessarily have to pay the full tax bill every time.

Because I am a retail buyer and NOT a dealer for my personal cars, I pay sales tax on all the cars in my collection.

My rate is 6% to be exact for Florida, but Florida, like many states, allows what you call a tax credit giving you an opportunity to use a previously traded car’s value against the new value and only pay tax on the difference.

Here’s what I mean using an extended example of three cars that are a typical progression for a new Exotic Car Hacks member:

Let’s say you buy a 2011 BMW M3 for $30,000 and pay the $1,800 in tax.

Then you upgrade to a $60,000 2015 Maserati GranTurismo MC, selling the M3 for $30,000 in the process.

Using the trade-in tax credit system, you’ll only need to pay tax on the second $30,000, or $1,800 again.

Then let’s say you trade in the GranTurismo for $60,000 against a $100,000 2007 Lamborghini Gallardo.

On the Lambo, you’re only paying tax on $40,000, or $2,400, because of the Maserati trade.

All told between $190,000 of purchases, you’ve paid $6,000 in taxes, an effective amortized rate of 3.15%.

The more cars you hack, the more you save on taxes over time.

If I had to guesstimate, my overall tax costs on my cars in the last 3 years is around 1%.

Keep in mind, this only works if you’re trading your car in on paper.

You can still sell to an end-user, but you must find a dealer locally who will pass your deal through them to save you sales tax over time when you sell or buy a car.

They’ll typically charge a small “document fee” of a few hundred dollars for this, which is worth every penny.

This is where partnerships come in handy, something you’ll learn as a member of Exotic Car Hacks.


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