The unknown realm of the legal regulations, laws, restrictions and requirements kept me from pursuing vehicles for quite some time. My concern was that I didn’t want to get bit by some law I was unaware of and in turn create a big mess for myself.
I researched the topic off and on during this time and finally read enough that I got to the point of, “I just need to try it”. So I did.
As an Illinois resident, one can sell up to four vehicles as a private individual per year. My wife and I are both Illinois residents so we are each allowed to sell four vehicles. I bought a motorcycle out of Minnesota a while ago and when I was at the Illinois Secretary of State Office registering for an Illinois title on the bike I was required to enter my current age on the Minnesota Title that I was relinquishing. The clerk at the desk said, “I don’t know why Minnesota requires you to declare your age, in Illinois you can title a car in a baby’s name if you want to”. Bingo! Mental note! I knew having four kids was gonna pay off sooner or later. While it’s apparently legal for me to do this I have no intent. Honestly, I don’t even have the time to do the eight vehicles that my wife and I could title. I have a full time job and the vehicles thing is really just a fun hobby. For me it is a much better option than sitting around the house watching tv or simply frittering away my time. As a kid I was frequently told, “go find something constructive to do”, if I was sitting around the house or complaining about being bored. So Dad, I’ve finally found something constructive to do.
As a private individual it’s illegal to resell a vehicle that is not titled in your own name; often referred to as “pass through titles”. I make it a point to always title every vehicle that I have acquired and to also pay the correct and appropriate state sales tax that is due at that time. My take on this is that I have enough problems to deal with as it is and I don’t need to go creating new ones for myself because I was trying to save a couple hundred bucks. The other aspect of this topic is that as a Christian guy I ask for God’s blessing on each vehicle I pursue. Now why would I expect God to bless my actions if I am knowingly cheating the State of Illinois on tax dollars and the legal requirement of titling the vehicle; I shouldn’t. When Jesus himself was asked whether or not it was right to pay taxes He so famously stated, “…give back to Caesar what is Caesar’s”. If it’s good enough for Jesus its good enough for me.
It’s also recommended that at each vehicle transaction, whether buying or selling, that a formal bill of sale be used that both parties sign. In Illinois this is the only document that can/should acknowledge the terms of the sale. I found a standard bill of sale document template online that I have used throughout each vehicle I have bought and sold. The document specifies the VIN, title number, make model and year of the vehicle, color, style of vehicle, odometer reading, and then has section for each party’s names and signatures. The selling price is also listed on the document along with a section for a deposit and relevant terms associated with obtaining final payment.
Honesty is the best policy. As a kid I remember my Dad telling me, “If you always tell the truth you never have to remember what you said”. It was true then and it’s true today.
I looked into the requirements of becoming a formal Dealer in Illinois because I figured it might be a way to make my activities cheaper. I learned that Dealer’s don’t have to title each vehicle or pay taxes on the vehicles they buy. The Dealer’s license comes with two Dealer’s license plates too so I wouldn’t have to register each individual vehicle either. Title and registration for cars, trucks and SUVs in Illinois are pretty much always $196 and then tax is $25+ depending on the age or value of the vehicle. So the Dealer’s license would be cheaper with five vehicles per year. But it’s not quite that easy.
There are also other obligations that come along with the Dealer designation. You have to have a store front, that storefront has to have posted hours, you cannot operate out of your home, etc. It didn’t take long to figure out that this wasn’t something I could do. Again, I’m doing the vehicle thing as a hobby. In order for me to pursue it at the dealer level I’d have to make it my full time job or hire someone else to run it as a business. Not happening.
In Illinois I found that the process of buying and selling vehicles is pretty easy. Each state is going to have its own laws on various topics so make sure you take the time to identify your own state’s requirements and limitations so you can adhere to them and avoid unnecessary hassle.