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Long distance purchase

Discussion in 'Prime Main Forum (2017-2022)' started by Priusaurus, Aug 24, 2019.

  1. Priusaurus

    Priusaurus Junior Member

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    I live in Colorado and I am planning to purchase a new 2019 Prius Prime from a Toyota dealer in California. I've researched the process as best as I could but definitive answers have been hard to get. I'd appreciate any feedback and corrections on the following topics:

    - To qualify for the $5,000 Colorado PHEV tax credit, the car must be new and titled/registered in Colorado. The tax credit rules don't say that the car must be titled for the first time in Colorado (some dealers appear to think the car must be titled first in CA). But no one at the DMV or Colorado Department of Revenue has been able to tell me whether the car would still be considered "new" if I were to pick it up in California and drive it to Colorado.

    - If I pick up the car in California, I understand that I will have to pay California sales tax. Also, I know that Colorado will give me credit for sales tax I pay in California. But I cannot determine what that means in actual practice. For instance, if the CA sales tax rate at the dealer is 8% (6% state tax and 2% local tax) and the tax rate where I live in Colorado is also 8% (2.9% state and 5.1% local), would I get credit for having paid 8% (actual rate paid), 6% (California state tax rate paid), 2.9% (Colorado state tax due) or something else?

    - As a way to avoid paying any sales tax in California, I am considering having the dealer arrange transport out of state. The CA rules regarding dealer sales to out of state residents do not specify that transport must be arrange to the state of residence of the out of state buyer. Does that mean I could take possession of the car in Oregon or Nevada? If so, will I be able to get the necessary travel permit to drive to travel across one of those states given that the car wasn't sold there and neither the seller nor the buyer are residents of those states?

    - Anything else I should worry about or pay attention to?

    Thank you.
     
    #1 Priusaurus, Aug 24, 2019
  2. schja01

    schja01 One of very few in Chicagoland

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    I use to be on a Credit Union board of directors. That was some time ago but if a car was titled previously it wasn't considered new any more even if titled by a dealer, say, for use as a loaner etc.
    Also I would wonder how your car insurance would be handled driving an untitled car.
    Did you contact Diane Whitman? She seems knowledgeable and quite a while ago seemed fine with shipping a car to one's doorstep.
     
    #2 schja01, Aug 25, 2019
  3. jb in NE

    jb in NE Senior Member

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    I have done exactly what you want to do, but I live in Nebraska and bought in California and drove it home.

    You don't want to (or need to) title the car in California. Dealers will tell you this is required, but they are incorrect. You can buy the car in the state of California, pay their sales tax (which is required if the vehicle is delivered in the state), get a $12 (approx) one-trip permit and drive it home. Then go to your DMV with the purchase paperwork which must show the sales tax collected, and register the vehicle for the first time in your state.

    FFVR 36

    If you purchase the car in California, do not register it there, and drive it home, you are registering it in Colorado as a new vehicle. This is no different than buying the car from a dealer in Colorado and driving it to your house - it is still a new, untitled vehicle with a manufacturers' statement of origin.

    As for the sales tax credit offset, you will need to ask your DMV or local taxing authority. In Nebraska, the offset is only up to the amount of sales tax due in the state of Nebraska. I paid 9.25% in California, but Nebraska rate is 7.5%. So, Nebraska was satisified that I paid the required 7.5% tax on the car (albeit to a different state) and did not charge me Nebraska sales tax. I did not receive a refund for the difference between 9.25% and 7.5%. I accounted for that when I purchased the car and with a better purchase price in California I still came out well ahead of buying the car locally.

    You can have the car transported out of state in CA, but this may involve shipping which you will pay for. Dealers at or near the California border are reported to do a brisk business delivering cars a few miles down the road, across the border. In that case, they collect no sales tax and you drive the car home and register there. Another option would be to ship the vehicle directly to your house. That avoids the sales tax and driving it, but I found that the cost of shipping was fairly high when I bought.
     
    #3 jb in NE, Aug 25, 2019
    Last edited: Aug 25, 2019
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  4. frodoz737

    frodoz737 Top Wrench

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    I can't speak for CA tax laws, but I helped my Mother and Mother-in-law buy their current vehicles in TX and they paid the TTL in their home State. Their was a small doc fee added to the invoice for the TX Dealership, but that was it. They had their own financing from their home state using their home address. They give them a temp tag to drive home I know, because I drove with them.
     
    #4 frodoz737, Aug 25, 2019
  5. Priusaurus

    Priusaurus Junior Member

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    Thank you for the responses. The dealer has quoted me $1,200 to deliver the car to Denver, which is in line with what I was quoted elsewhere. So that seems to be the simplest way to go at this time. I'll post an update when the car is delivered.
     
    #5 Priusaurus, Aug 25, 2019
  6. jfschultz

    jfschultz Active Member

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    I bought a PiP six year ago from Dianne and had it shipped to me in Tennessee. At that time the shipping cost was $900 and it arrived at my front door. The biggest issue I had was that the California paperwork did not require a notary. When I went to the Department of Revenue office to pay the sales tax and get the temporary tag, they insisted that it had to be notarized.

    On the way to the bank, I drove by a dealership and I decided to try there. When I parked the car several salesmen came up asking "What trim level is THAT?"
     
    #6 jfschultz, Aug 26, 2019
  7. Priusaurus

    Priusaurus Junior Member

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    A quick update on my purchase. I received the car about a month ago and couldn't be more pleased with it. The transaction was "bumpy", mostly because of ignorance of what was involved on the part of the dealer. But now that it's done, I wouldn't hesitate to purchase from out of state again.

    A few things to keep in mind if you plan to do the same thing:

    - If you decide to pick up the car in person, you will most likely need to pay sales tax to the state/county/city where you buy the car.
    - Your state may not give you credit for all the sales tax you pay when you pick up the car. In my case, had I picked up the car in CA, I would have had to pay 6% state sales tax. Sales tax where I live in CO is 8.1% (2.9% state sales tax + 5.2% local tax). Because CA and CO have an tax exchange agreement, CO would have required me to pay the 2.9% state sales tax. But I would still have been liable for the full 5.2% local tax. This would have resulted in an effective sales tax of 11.2% (6% to CA and 5.2% to local in CO).
    - If you buy the car in California, you will get a CA title, even if you do not intend to register or use the car in CA (I could not convince the dealer to let me have the Manufacturer Statement of Origin instead). I am unsure whether having the car first titled outside CO will affect my ability to receive the CO PHEV tax credit (the CO law states that "The purchase or lease of a vehicle previously registered in Colorado or any other state or jurisdiction does not qualify for the credit"). So, holding my breath on this until I see the credit go through.
    - If you have the car shipped to you, you may not receive the paperwork in advance and the car may not have temporary tags/plates. So unless the car is delivered to the garage where you will keep it until you have the paperwork squared away, you may have to take your chances getting the car to your home (mine was delivered to a Home Depot parking a few miles away).

    Let me know if you have questions about the process and I'll be happy to elaborate.
     
    #7 Priusaurus, Oct 27, 2019
  8. kpbadger

    kpbadger Junior Member

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    I recently bought our new Prime out of state and my experience was nothing like yours. From my research I think that it’s California that’s different.

    - Bought car from a dealer in Maryland and took delivery there.
    - MD has a 6% tax on new vehicles but I did not pay it because I was from out of state.
    - Did not title the car in MD. The only fee was $20 to MD for the temporary tag.
    - Brought certificate of origin and bill of sale to Wisconsin DMV, paid fees plus our 5.5% sales tax, and titled vehicle as new. Title shows 11 miles (mileage when I picked it up) not the nearly 1000 miles on it from the drive home.

    This was the same process as when I previously bought a car in Illinois and this time talking to dealers in MA and NY they said this would be the same there as well.
     
    #8 kpbadger, Oct 29, 2019
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  9. Deb G

    Deb G Junior Member

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    wow. I live in Ohio but bought my new Prius from a dealer in Chicago. They collected the Ohio tax. They gave a wonderful orientation to the car and sent me on my way. It was very simple
     
    #9 Deb G, Oct 30, 2019
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