Selling an out of state purchased car (new) using an MSO in California

Ask the Hackrs
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Hello guys, new here, seems like a great place for me as a person who is really into cars and being efficient with my money!

I have a rare scenario which I would like to get your thoughts on. I will start by saying I asked this question two different DMV agents and both assured me I won’t be doing anything wrong and that it is completely legal. But I want to be absolutely sure.

So here is the story - I live in NorCal and I purchased a new car (a pretty rare one) out of state for a long trip. The car was purchased from an out of state dealer. I used my California home address for all the paperwork.
I took a flight to the dealer and picked up the car. Drove it for a few weeks (eventually it was only a few hundred miles as the trip was cut short) and then gave it back to the dealer so it will be shipped to California so I will be able to sell it (the dealer didn’t want to buy it back from me).
On the very same day, weeks before the car arrived at California, I already found a buyer that was willing to wait for the car to arrive. The buyer is also from California.

I hold the MSO which was given to me by the out of state dealer when I purchased the car along side a bill of sale between me and the dealer. The first page of the MSO states all the information about the car with the dealer’s name and address, and the other side of the paper states my name, address, etc. along side an official signature (next to “Distribution - Dealer Assignment Number 1” text).

I want to sell the car to my buyer using the MSO and a bill of sale between me and my buyer. The car is not yet registered\titled in any state.

I haven’t, and don’t plan to, drive the car a single mile on California road. The buyer will literally take the car from the transport company parking lot.

I just want to make sure I am not doing anything illegal, as it seems a bit like “title jumping” - even though the DMV representative told me I am not doing anything wrong - as long as I haven’t used the car in California.

Would appreciate any help!
My goal here is to get rid of the car without paying use\sales tax to the DMV as the car wasn’t driven in California by me at all.

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Does the buyer know this and is okay with it? Personally, I wouldn’t buy a car for a non-dealer without the seller having the title in his name.

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This is title jumping … if the car is not registered to you, it’s not yours to sell.

I can’t comment on what that means for you, but the dealer will not like this lol

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It sounds like you know you’re deliberately coloring outside the lines, getting cold feet, and for some reason you’re asking a group of people who try to find good combinations of discounts a detailed legal question.

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Sounds like my guy bought a demon
Rip that dealer

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You already drove this car for weeks using your CA address. The dealer must have started title work somewhere? And I assume you had insurance on it during the road trip?

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Too bad dealer and DMV records ask for pesky odometer reading. And this car will show miles driven while registered to someone in California.

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If DMV says you can do it, and that is documented, did they explain to you how the process will work? If not, why not get that from DMV first as opposed to coming on here and asking a bunch of non-CA DMV employees (from all over the country) for their “expert” advice?

That makes zero sense.

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Expert Succession GIF by The Ringer

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GPT4 says:

Your situation is indeed unique and it’s understandable why you’d seek clarity. Here are some considerations based on the information you’ve provided:

  1. Title Jumping Concerns: Title jumping, which is the act of buying and selling a vehicle without registering it in your name, is generally illegal in most states. However, your case seems to involve a direct transfer from the original MSO (Manufacturer’s Statement of Origin) to a new buyer, which might be viewed differently. Since the car was not registered or titled in any state and you’re transferring it directly from the MSO, it may not constitute typical title jumping.

  2. Use/Sales Tax Avoidance: If the car was not used or registered in California and you’re selling it before such registration, it might be possible to avoid the use/sales tax. However, this can be a gray area. Tax laws can be complex and vary significantly. It’s important to ensure that all actions comply with California’s tax regulations.

  3. DMV Confirmation: You’ve consulted with DMV agents who assured you of the legality of your actions. While their input is valuable, it may also be wise to get written confirmation or consult with a legal expert specializing in vehicle laws and taxes in California. Verbal assurances can be misinterpreted or may not cover all aspects of your situation.

  4. Legal Consultation: Given the unusual nature of your transaction and the significant financial and legal implications, consulting with a lawyer who specializes in automotive or tax law might be a prudent step. They can offer advice tailored to the specifics of your situation and ensure compliance with all relevant laws and regulations.

  5. Documentation: Ensure that all paperwork, including the bill of sale and any agreements with the buyer, are comprehensive and legally sound. This will help in avoiding any future disputes or legal complications.

  6. Future Implications: Be mindful of any potential future implications, such as liability issues or disputes over the vehicle’s condition or history. Proper documentation and legal advice can help mitigate these risks.

In summary, while the DMV agents’ assurances are encouraging, due to the complexity and potential legal and financial ramifications, getting a formal legal opinion could provide you with more definitive guidance and peace of mind.

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Screenshot 2023-12-23 at 8.58.35 AM
Screenshot 2023-12-23 at 8.58.35 AM916×882 481 KB

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The deal is far from shady, as the buyer is aware of everything. The dealer didn’t start any paperwork with CA-DMV, and just gave me everything I need, but didn’t send the DMV anything. The car wasn’t insured by me, it was insured by the manufacturer. The car only driven about 300 miles, which is actually LESS than what my wife BRAND NEW Mini cooper had when we purchased it new from the dealer.

Many people here commented like I am deliberately trying to break the law - where in fact the opposite is correct: if I will think for second there is the slightest risk that what I am doing is illegal - I won’t go through with the deal.

I came here because Google search lead me to several other threads in this forum where people asked about MSO\MCO and knowledgeable people answered. The DMV is closed until Tuesday so I can’t call them, and I thought I might get second opinion here.

@DailyDriven - it is indeed recorded, twice, here is the first conversation:

Me:I have a special case I would like to ask you about. A month ago I purchased a car out of state and received an MSO and a bill of sale. I used the car out of state for a trip and now would like to sell it using my MSO without registering it in California as I don’t plan to use it not even for a single day

Me:is that possible?

Agent:Yes it is

Agent:You would just provide them all the paperwork you have and create a new bill of sale or pick up a new bill of sale from the dmv office.

Me:and it is completely legal? I will store the car in my garage and won’t drive it until I find a buyer

Me:I won’t be breaking any laws?

Agent:Correct

Me:Appreciate your help, have a nice day!

And here is the second one:

Me:I have a special case I would like to ask you about. A month ago I purchased a car out of state and received an MSO and a bill of sale. I used the car out of state for a trip and now would like to sell it using my MSO without registering it in California as I don’t plan to use it not even for a single day, I purchased it solely for the trip as I couldn’t find the right rental car for my trip. I was told I can transfer ownership of the car to the person who purchase it from me, which is also a California resident, by signing the back of the MSO and a bill of sale between me and the buyer. Just wanted to make sure it is correct and I won’t be breaking any law.

Agent:Yes, that is correct

Me:I appreciate your help. So when I when me and the buyer will come by a DMV office to transfer the car to his name, we won’t have any issues? The car isn’t registered in any state yet, and I am holding the original title from the manufacturer - the MSO

Me:Just want to make sure as both me and my buyer are slightly worried

Agent:No, we will require a smog to get it registered, but all the transfer paperwork can be started in office.

Me:Great, thank you for your time

Agent:Thank you for chatting with me today. Have a nice day.

Me:Have a nice rest of the day

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[quote=“dnl1337, post:12, topic:517999”]
The car wasn’t insured by me, it was insured by the manufacturer. [/quote]

Once you buy a car and drive it off the lot, how is it insured by the manufacturer?

Your conversations with the DMV do not address the real issue here - do you owe sales/use tax on the car.

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OPs new home

Arrested Development Mistake GIF

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Well let me just ask you the obvious question then… Why don’t you want to register it in your name first?

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Bingo on both. I would also be wary of using that chat history as the backup for doing this.

  1. The insurance issue seems odd at best. The manufacturer “insured” the car? Really?

  2. The sales tax issue from DMV’s standpoint may not be theirs to collect as this was all of state, but the CDTFA may require you to pay sales tax to them as a CA resident as you bought the car from the dealer (not the person you are selling it to), are not a dealer/broker yourself (so as to avoid sales tax, etc.). May be true even though the person you are “selling” to has to pay sales tax as well. He didn’t buy it from the dealer and you did, and avoiding the tax may be difficult.

Better check with CDTFA as well.

On the hook for CA sales/use tax is my guess.

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And they do find out I remember I got a 2k bill for a car I had bought 3 fucking years ago
And these fuckers wanted interest from day one :sob:

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Cause I don’t want to pay California use tax on something I haven’t used in California

The law clearly states -

Use tax applies to the use of any property purchased for storage, use, or other consumption and stored, used, or consumed in this state

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I don’t trust the chat history, that’s why I also came here, and that’s why I will call them first thing Tuesday morning. If this thing gets even slightly illegal, or they will tell me I have to pay use tax even though I haven’t used the car, I won’t go through with the sale, and will just suppress my buyers remorse and use the car.

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Can you elaborate on your case? It might shed some light on mine