Buying a car with cash

[T-type]

I am in need of a new vehicle and I would like to spend around 10k.
Cash.

Does anyone know what gets reported to who on a vehicle transaction? Maybe the amount threshold for reporting?

I don't want to speak of anything illegal on this thread. Nothing about money laundering or anything, but if someone could let me know about the above questions that would be great.

 

[wanderer]

I bought my Benz the very same way. A briefcase full of money. It wasn't for any evasion but to get a sweet deal. My father taught me how to manipulate car salesmen long ago. When they asked me what the most important thing about the car I told them it was the actual final cost of the car and drove the bargain towards the best price. They assumed they would re-coupe on the refinancing. When I signed the deal and it was approved they brought me to the insurance/finance guy and I opened my briefcase. Their faces turned white as they knew I had taken all their profit!

Anyway all dealerships, etc report the transaction to DMV so they can get their "fair share" of the tax when you go to get your title and registration. The only way I know of avoiding this is to "go private".

Probably varies by state, most have the regulations at the state DMV web sites.

Hope this helps.

 

[Dirty Harry]

I think in the USA, in terms of banks, any transfer of $10,000 cash results in an IRS report. I am not sure about a purchase with cash in hand, but when the dealer deposits that cash, they will get flagged for an IRS report so I am sure your info will follow with it.

 

[Tactical Farmer]

For a new vehicle you should try & demanded the MSO (manufacture statement of origin) if payed in cash.

The state takes the MSO & give you a half ownership title with stings attached so they can charge you fees (plates, registration, inspections, etc) & regulate the way you use the vehicle.

What a great deal, thanks big brother..

 

[cashmunny]

$10K cash may raise some eyebrows but maybe not. $10K is the cash transaction limit for IRS reporting at banks. Not sure about a car dealer. I'd buy from a private party with that much cash. The added benefit is that you may be able to get the seller to under report the sale price to the DMV. Thereby saving you taxes and beatin' the man.

 

[headiez247]

$10k is the limit.

Realistically people buy 20, 30k cars with cash/cashiers check all the time but the technical number that requires reporting is 10k.

 

[Molson]

Why not make a few calls? It can't hurt...

 

[T-type]

So am I correct to assume that under 10k won't be directly reported to the irs?

Is this just when it is mandatory? Do dealers report smaller amounts ever?

It seems I may be better off just giving them a sizable down payment and financing the rest?

 

[Anti]

Under 10k you should be fine.

Better deal if you're buying cash would be to find a private owner.

They're trying to get blue book from it, not pay the rent.

 

[wanderer]

Yeah, places like autotrader.com are a great source for private sales. More bang for the buck, but then again, no warranty either.

 

[John Bourne]

I would suggest calling your bank or looking up dealers online that specialize in selling repo'd cars in your area...A couple years back I bought a vehicle in the States as I needed one from time to time when I happened to be there. Found a guy that specializes in financial repo's, and bought a car valued at $25k direct from the bank for $10k cash. The car was meticulously maintained and in excellent condition, just so happened that the guy who owned it couldn't keep up the car payments, so the bank took it back...Was the best vehicle value play I've ever made....

 

[herewegoboys]

So if you go through a private seller, how would your name get to the IRS? The seller wouldn't list your name via the vehicle contract on his taxes, would he? Or is it the DMV that we are concerned about here?

 

[headiez247]

So am I correct to assume that under 10k won't be directly reported to the irs?

yes

Do dealers report smaller amounts ever?

no

It seems I may be better off just giving them a sizable down payment and financing the rest?

Financing is always better if you care about your credit history/score.

If you want to buy a car from a dealer (vs a private sale) and the car is more then 10k and want to be extra careful, put a downpayment of 9900 down and finance the rest.

 

[milehighmedical]

.

 

[joe fresh]

i would look into car auctions, get a great deal, and at auctions you have to pay cash

 

[Yes4Prop215]

thats why buying private party is best. you can manipulate the price on the transfer. but when you buy from a dealership anything over 9k cash is gonna raise eyebrows. nothing might happen, but its risky.

i just picked up a 18k car...i traded a car worth 10k and added 8 cash on top. if the IRS asks anything about its money i have been saving up.

going out and buying a 50k benz cash when you only claim 20k in taxes = bad bad bad

 

[rick shaw]

IRS requires Form 8300 to be filed with each transaction over 10,000. Hundreds of thousands of these documents are filed each year.
As far as "suspicious activities", most financial institutions are required to fill out suspicious activity reports. The SAR is reported to the Treasury Departments Financial Crimes Enforcement Network on FinCen Form 109 Suspicious Activity Report by Money Service Business. When the government receives an SAR it is not just filed. Instead,it is effectively a criminal complaint that would initiate an investigation against a customer.
You will have no problems with cash on a car purchase.

 

[ak-51]

So am I correct to assume that under 10k won't be directly reported to the irs?

I remember seeing or reading something where a bank employee stated that even though 10k is the max, they are free to, and will, report any suspicious transactions to the government. I don't know what qualified as suspicious, nor do I know how prevalent it is that they actually report it. The other thing is that the bank is different than a car salesmen. Take that for what it is.

I think buying private party is probably the cleanest route. You can lie (everybody does) on the title about how much was paid. Obviously your selection will be limited.

In a free country there is nothing illegal about using the standard government issued currency for transactions. It's too bad that doing so has such a stigma.

 

[TomPope]

We (CH) have grocery-stores and post-offices acting as banks. The girl behind the cash-register has to check if the transaction is suspicious or not. I usually give the 17 year-old apprentice a smile, she goes all red-faced and takes my cash.

I for sure wont get boned by a bank. I bone them greedy mofos!

 

[krustytheclown]

What he said.

What he said.

IRS requires Form 8300 to be filed with each transaction over 10,000. Hundreds of thousands of these documents are filed each year.
As far as "suspicious activities", most financial institutions are required to fill out suspicious activity reports. The SAR is reported to the Treasury Departments Financial Crimes Enforcement Network on FinCen Form 109 Suspicious Activity Report by Money Service Business. When the government receives an SAR it is not just filed. Instead,it is effectively a criminal complaint that would initiate an investigation against a customer.
You will have no problems with cash on a car purchase.

^^ What he said.

If you buy a car from a dealership, see if they will accept part of the purchase to be paid for with a credit card. Most dealerships allow $2500-$5000 to be put on a credit card. Then pay the rest in cash.

Just make sure no more than $10,000 actual cash changes hands. That results in the IRS filing. In fact, do NOT get cute and give them $9,999 cash, either. That will also generate an IRS report and possibly a SAR.

I would set the limit of cash actually changing hands to be no more than $7000-$8000. Either get a car loan for the rest, or pay for it with a credit card.

I recommend paying with a credit card, where possible: no origination fees, application fees or prepayment penalty. Your credit doesn't get pulled, either.

As a final item, if you do buy a car from a dealer, NEVER, NEVER, NEVER, NEVER, NEVER NEVER sign a credit application for ANY reason whatsoever. They will pull your credit 15 times and completely screw up your credit rating. And any financing they offer you will be crap. If they say you must sign it or no deal, waive the cash in their face and walk away. If you really need a car loan, get one approved by a bank before you ever step foot onto a car dealership.

A side note: Did you know that because of the PATRIOT ACT (passed by a Democratic Congress, signed by a Republican President, and any part of which has yet to be repealed by the current Democrat Messiah...err...President Obama, by the way), the government may monitor ALL your finances and they are NEVER required to tell you about it? Did you also know that no financial institution that is part of the monitoring is allowed to tell you that you are being investigated? It's nice to know pesky things like the Bill of Rights don't have to come into play when the government is just trying to help us. Heh