Looking to purchase a used Z06 from a private individual who won the car. The car has not yet been registered. There's no private party sales tax for AZ residents. If I was to buy this car would I have to pay his initial taxes since he hasn't paid them yet?

 

I wouldn't think so if you are a resident of AZ, but what I would be more concerned whether he has paid the Federal Tax on his winnings. If you win a car, you have to pay approximately 20% Federal Income Tax because the car is like them giving you cash, and therefore income. Before they will give you the car and title that would have to be paid.

 

Well I'm no attorney but how can he sell you the car if he doesn't own it? If he hasn't paid the taxes, he doesn't own the car, I wouldn't think. No state government is going to pass on a title and registration until the taxes are paid. If you do something under the table, then you would be considered the first owner and you'd have to pay the taxes. That's my opinion.....

 

He has the title in his name, probably transferred to him when he won it. It doesn't have a license plate. I flew out here to purchase the car but he doesn't want to give me the title. Due to the advice of his friend, a used car salesman, he wants to send the title to my DMV. States he wants to be sure I register it in my name but AZ DMV won't accept private party titles sent to them. Looks like I'm flying back tomorrow without a car

 

Sounded fishy from the get-go to me???

 

How are you paying for the car? Cashier's Check? If so that might be the issue. Cashier's Checks can be forged or the money they were written against withdrawn from the account before the check makes it back through the check processing system. This presents the seller with the potential of accepting a worthless document in exchange for the vehicle. Once he signs the title over to you for a worthless check he is stuck. Yes, there could be legal problems for somebody who did this but it takes a long time for that stuff to get sorted out and it is best to avoid the issue right from the beginning.

If this is the case you and he need to visit his bank and have the bank work with the bank that made out your check to get the money transferred immediately. This can be done if his bank is willing. I had this issue when I was selling my 97 Corvette. The buyer flew in and wanted to drive the car home. He had a temporary license from his state and a certified check. He didn't want to give me the check and wait for the check to clear before I gave him the signed title and I didn't want him driving off with my car and getting nothing in return. We went to my Credit Union and asked to speak to a manager who listened to our story, took the check and returned about 15 minutes later saying the money was already in my account and that I should sign the title. He had called the bank and they agreed to exchange the money right then instead of waiting for the check to wander through the system which can take 4 or 5 days.

Bill

 

Thanks Bill, I was going to do a wire transfer and wait until the funds showed up in his account.

 

I never understand why someone would want to even enter a race to win a car they love just to turn around and sell it immediately if they won. I guess maybe for the $$$.

 

I live in Arizona, if he has a clear title with his name and no liens listed on the front of the title, all he has to do is go to a bank and have it notarized along with his signature releasing ownership to you. You take the title to the Arizona Motor Vehicle Department and apply for a one trip permit which will give you temporary tags to get home. Your Insurance Company typically gives you 10 days to insure a vehicle, so you are fine there to get home.

Of course transferring the money to his account needs done. As far as his taxes are concerned on winning the car, he was issued a W-2G when he accepted the car, this is sent to the IRS and he has to pay taxes based upon Gambling Winnings.

I buy and sell a lot in Arizona, follow my instructions and you will be fine. Make sure to document everything including wiring the funds or a cashiers check, however you choose to pay him. PM me if you want to talk on the phone or if you want me to talk to the guy.

 

Thank you AZDan, I'm at the airport going home. I gave him one last chance at a deal this morning. His salesperson was out of town and he doesn't "feel safe," without sending the title to my DMV. Oh well, ignorance killed this deal. I think his salesperson friend was trying to sabatoge the deal because a couple calls to the DMV could've allievated their concerns. Lesson learned the hard way.

 

I don't know you, you don't know me, my Dad died 20 years ago, but he'd think this was sketchy. He'd tell me never to do it. If you wire transfer to a guy he can walk and you have no recourse other than to call the police and hope they care, they money is GONE as in gone.

Since you're at a minimum talking about $7500 of potential tax I'd talk to an attorney for 30 minutes. Cheap by comparison.

Here's a description of the "Sweepstakes Car Scam" typical characteristics, by the way. Not saying it is that just be on the lookout.

To avoid falling victim to a lottery or sweepstakes scam, beware of these five red flags:

You have to give personal information. Anytime someone tries to get your bank account number, Social Security Number or other sensitive information, that should be an automatic red flag.

You have to pay to win. Don't be blinded by the promise of a large sum of money in the future. If they are asking you to give them money first, that’s a red flag. Legitimate prizes do not come with processing fees, and taxes are paid directly to the Internal Revenue Service after winnings are collected.

You have to purchase wire transfer funds. If you are asked to use these transfer methods in order to get a prize or any other large sum of money that is a major red flag. It’s difficult to track these types of transactions, so you will have little to no way of getting your money back.

 

Treat this transaction like a house...
Title and escrow.

 

Are you saying have a 3rd party broker the deal?

 

I think their excuse was total BS, what does it matter to him if the title is sent to your DMV? I am thinking they were trying to scam you out of the cash, you pay them, they allegedly will send the title to your DMV, you drive the car away, they report it stolen, you get arrested and they get the car back plus all your cash.

What I posted above is how a transaction in Arizona actually works.

 

https://www.escrow.com/cars

 

I've used Escrow.com for a number of larger purchases (domain names) and had good luck with them. Problem is usually both parties haven't heard of it, so one will be leary.

While Escrow.com is real, people have been known to set up fake Escrow companies online too!

 

Yeah, I don't know. Wouldn't I be safe with a signed bill of sale and witnessed him fill out the title. He offered to have me go with him to fed ex and overnight it to my DMV (moot point). I test drive the car and fell in love, dammit. I think worst case senerio I'd have to get a bonded title $$$. Anyhow I felt like I tried my best. I just like to examine things to hell I guess.

 

So did he have some great deal? East coast dealers have some huge discounts on new. Just sayin.

 

Walking away was very likely the best end result. Just go to a dealer, make a good deal on a car you like and buy it. The thrill will be even better! Chaulk this one up...."God's will".

 

Yeah, it was a Yellow Z06/07 3Lz msrp 109k. My ideal car 😢