MSO, Title and State Tax? Explain?

[dealmaker]

Guys,

Need a bit of advice here as I am am bit of a dumb-ass when it comes to the whole issue of USA title issues. (Seems very different to the way we do it in Europe)

I'm looking to buy a GT for myself for subsequent export to the UK.

I've been looking at some "used" cars and some "new" cars at dealers (albeit that they are mainly 05 models - and have some miles on them) I have been offered a few at circa $150k for a "new" one.

I don't understand this whole MSO thing - what is one of those? And when do you have to pay the state tax on a car?? For example if I buy one in Wisconsin - and I am going to export it to England - I don't actually need to use it on the road in the USA - I simply want to put it on a truck to the east coast - but when it gets to the port I need to be able to prove I have the "title" or they won't let me put it on a ship (in case it's stolen).

So can I get the "title" for a car WITHOUT having to pay state sales tax?? Or do you need to pay the sales tax to get the title??

I've also been offered a few "private" cars - which hopefully have been titled and the tax paid - but the thing thats putting me off these is the fact that I've heard horror stories of cars taking a very long time to have the title transferred (and so thereby delaying shipment) and people buying cars that have outstanding finance on them - so they don't really OWN the car until the finance is cleared??

If I can establish that I can buy a car from a dealer, get the title documents and NOT have to pay state sales tax - then it sounds like that might be the best way forward?

Thanks for any advice.

 

[Indy GT]

MSO and such

Dealmaker-
Let me preface this by saying I am not an expert, just general information I have learned over the years of buying new and used cars.

Of the two methods you discussed for your situation of wanting to export the car to England and use in Europe, I would favor a new car with an Manufacturers Statement of Origin (MSO). This is a piece of paper which looks official (like a title) and is generated by Ford. It states that the car has been produced by Ford, is new and has not been titled (you need this MSO to present to the state to get your initial state title) and has the VIN and date of manuf. This is your "title" to the car before it is registered with a state. I favor this approach because-

1. The MSO follows the car quite quickly, infact if you are looking at new 05's the dealer most probably already has the MSO in his files. When I took delivery of my new 06 after dealer delivery, the MSO arrived within a week to 10 days, well within the typical 30-day temporary tag most dealers give you on new car purchase.

2. The MSO can and most often does go to the dealership mailing address. Thus making it easier for you if you have no domestic mailing address within the state you want to purchase the car.

I would think you could purchase the car, obtain the MSO from the dealer indicating ownership and head to the shipping docks to ship your car back home. The MSO in your posession would prove ownership. And since you did not register the car within any state, no state sales tax would be paid or owed.

If you purchase a used car which has been previously titled, the seller endorses the back of the title indicating he has "sold" the car to you (after funding transfer of course). If the car has been financed, the finance company holds the title (a lein is filed against the title) and the seller must take "your" money and go pay off the loan at which time the finance company returns the title. If the finance company is out of state, this further lengthens the transaction and if local with transactions of this amount, the title company may need some time to "clear" the funds before releasing the title. You (the new owner with the old title endorsed by the previous owner) must then go to a state Bureau of Motor Vehicles (BMV), present the endorsed title and request a new state title for the vehicle in your name. Typically a nomimal fee for a new title ($10 or so in my experience but other states may impose different fees) and give them a mailing address. Not sure what they would do giving a European address but that might be an issue.

This process (for you to get a newly issued title to the car in YOUR name to prove ownership) may take 4-6 weeks. Can you show up at the shipping docks with the previous owners sale indorsed title, I do not know if that is acceptable or not. Maybe it is. In any case you can just TITLE the car in the purchasing state for a nominal fee. The sales tax is not paid until you REGISTER the car in the state and get a license plate to drive it on the streets. Since you do not plan to do that, I believe you can avoid the sales tax collection at this point as well because all you need is a title to prove ownership to the shipping company.

Hopes this helps somewhat and if I missed the mark others will I'm sure correct. Hope you are successful in you purchase attempt. They are wonderful cars as the postings on this Forum attest. Join our club and enjoy!

 

[dealmaker]

Indy GT,

Thanks for the thorough response - things make more sense now.

 

[AZGT]

When I took delivery of my new 06 after dealer delivery, the MSO arrived within a week to 10 days, well within the typical 30-day temporary tag most dealers give you on new car purchase.

That's because you took the car and paid tax and plate fees - you have temporary plates to show it is registered.


In the US the private party sales tax will depend on what state you are in if you live here. For example, Arizona does not have sales tax on private party sales, California does.

I just went through the process of buying a car in a foreign country, California.

The deal was more of a PITA because in California, the owner does not hold the title, the state does. Then, if there is a lien, the lien holder needs to notify the state of the release, then the title can be obtained.

To make my deal work (it took longer than usual - 40 days - but that was because of the stupid lein holding bank not obtained a proper pay off amount), I obtained a bill of sale, power of attorney, odometer disclosure (all of those on both California and Arizona documents just to CYA), copy of the lien release, then FINALLY the title.

Since it came to Arizona, no sales tax. But license plate fees are about $2,300.00 here. Since it is a rack queen at the moment, I chose to just title with no plates. Cost a whole $4.00. Much better.

If you buy a new car from out of state, you don't pay sales tax when you purchase it. It will be collected at registration. The tax man is pretty smart to make sure they get all they can. For export, not sure how that works, but in general if the money is mailed - wired from out of state and the shipment is to an out of state address, no sales tax at the sale.

I purchased a Jaguar in Canada, so some of the same issues like you are having. Needed import papers. The most important was a statement from Jaguar of North America that the car would meet USA standards and emissions. I would imagine you will need something similar. The car could not be imported without it. They put the title in my name with the US address to make it easier to cross the border, but just did not plate the car. Came through with no problems. And, in fact, since it was already in my name, no sales tax to convert to a local title, just plate fees.

Anyway, I would check first to see if you need an import declaration. After that, I would look for a car on MSO since it will be "new", will have full warranty, and the dealers are probably going to be a hell of a lot easier to deal with when you say you want to ship it out of the country. If you need the declaration, the dealer is in a position to obtain that easily.

 

[californiacuda]

Great discussion. In California there is a sales tax of at least 8% and then a substantial yearly licencing fees, you will spend around 15k for everything. Doesn't matter new or used.

Question about exporting to Europe. Would the car have to meet Euro specs?
Would it make a difference if it was new or used?

 

[Indy GT]

Quote:
Originally Posted by Indy GT
When I took delivery of my new 06 after dealer delivery, the MSO arrived within a week to 10 days, well within the typical 30-day temporary tag most dealers give you on new car purchase.


That's because you took the car and paid tax and plate fees - you have temporary plates to show it is registered.


Well....not really. I purchased my car out of state. My local dealers all wanted "stupid money" and all were 4-option cars. Bought mine out of state and as you state in your posting, I did not pay any title or registration fees in the purchasing state. Dealer still "gave" me a temporary 30day tag (for $5). So I could drive the car around with the temp tag and I had a bill of sale.

The titleing, registration and sales tax collection came in my domicide state when I plated the car for use. DMV girl gasped when she ran the numbers and gave me the bill. "You could buy a used car for that amount!!". Yep, but it's a FGT I am registering....

Hope this all helps Dealmaker get a car!!

 

[Empty Pockets]

DMV girl gasped when she ran the numbers and gave me the bill. "You could buy a used car for that amount!!". Yep, but it's a FGT I am registering....

Herein lies pretty much the ONLY tax benefit one gets living in Washinton State: the 'tabs for my GT run something like $80 or so (I forget the exact actual figure), and that's because it has a "vanity plate". It'd run about $35 w/o that.

'Apologies for the thread "interupt"...:slap

 

[B O N Y]

1. Buy from a broker like Marv Rose here in Fresno that understands exporting and the documentation needed.
2. Work with an international freight forwarder that has a long history of moving automobiles.
3. The documentation has to be perfect, I was recently asked to help sell an untittled GT, but the seller could not provide a unquestionable documentation.

 

[AZGT]

Herein lies pretty much the ONLY tax benefit one gets living in Washinton State: the 'tabs for my GT run something like $80

Geez - will you adopt me? Next year won't be so bad - drops al the way down to something like ................ $2,100.00.

Well....not really. Dealer still "gave" me a temporary 30day tag (for $5). So I could drive the car around with the temp tag and I had a bill of sale.

Sorry - you're right. I was thinking of the normal temp tag. We also have a cheap 3 day and 30 day permit here to let you do that type of stuff.

 

[fjpikul]

Dealmaker, most of the dealerships want to send the proper paperwork on a new car to your home state for title and registration for you (for a charge, usually $100). Just tell them no. Get the MSO and a temporary license tag and with the bill of sale you should be ready to go. On a used car, you need a "clean" title. Used cars from a dealerhsip should have this no problem and be able to show it to you on the spot. Buying used from an individual can be trickier. If they have the title in their possession, shouldn't be a problem. Get title and bill of sale, go to the state motor vehicle department and transfer title to your name. Will take weeks to get new title. If they don't have the title, probably financed the car and then the loan company is involved and want it paid off before they release title. May take weeks.

 

[fordcapri]

Talking from experience, you do not pay state tax when exporting to the UK on a new vehicle if you tell the Dealer when you buy the vehicle that you are exporting it to Europe, there should not therefore be any problem. If you obtain a good Shipping Company, ie. Mark Fromm, he will take care of all the documentation for you. Once the car has been declared to the US Customs it takes about a week for them to clear the car while they check for any finance on the car that might be owed. The only documentation you will need is a Certificate of Origin for the vehicle which the Dealer will supply to you, and a receipt for the purchase of the car.

The shock comes when you have to pay the UK taxes, I ended up paying approx. $50,000 to the good old UK Government!

 

[B O N Y]

Talking from experience, you do not pay state tax when exporting to the UK on a new vehicle if you tell the Dealer when you buy the vehicle that you are exporting it to Europe, there should not therefore be any problem. If you obtain a good Shipping Company, ie. Mark Fromm, he will take care of all the documentation for you. Once the car has been declared to the US Customs it takes about a week for them to clear the car while they check for any finance on the car that might be owed. The only documentation you will need is a Certificate of Origin for the vehicle which the Dealer will supply to you, and a receipt for the purchase of the car.

The shock comes when you have to pay the UK taxes, I ended up paying approx. $50,000 to the good old UK Government!

Be advised different states have different rules.