So, I bought this little Honda Accord...

[jwstewar]

I have a question on this. Why this would ever be, but what if you paid more than book value? Do they still go by book or is it actual price paid?

BTW, I have a '97 Accord that I inherited when I married the wife. It has almost 230k on it. Still runs great (sounds like heck though when idling or when accelerating through 1st gear) and I'm averaging 32 - 33 MPH. I do better when I run Shell gas vs. some of the other brands. I've done it often enough to know that it wasn't a difference in driving vs. the difference in gas.

 

[jinman]

Jim,

First I moved this thread - thought it was a better fit in "Related Topics" -

Thanks, Hazmat. Where did I post this? I must be getting senile or distracted (probably both). I thought I did post it in "Related Topics."

...and yes. TX does require insurance proof to register a vehicle legally. Having said that, if all the uninsured cars on our roads were to suddenly stop running, I think there would be a traffic jam so huge it would take weeks to clear.

 

[hazmat]

You were only off by one - it was in the Family & Friends section...

 

[Tig]

I bought a beater of a Ranger in 1999 and put 2K into making it shiney and reliable. When I went to register it I found out about the tax on book value. For me it worked out because the truck was so old. I'm not sure if book value applies to vehicles transfered as "unfit" My only objection would be if I paid $500 and spent $1000 plus tax to get it on the road. If they taxed me on a hypothetical book value of $1500 when I registered it, I would be paying tax for a second time on on the $1000.
I was told by a buddy that you can get an appraisal to proove that it is worth less. This of course opens the door for fraud again.

 

[Bird]

Thanks, Hazmat. Where did I post this? I must be getting senile or distracted (probably both). I thought I did post it in "Related Topics."

...and yes. TX does require insurance proof to register a vehicle legally. Having said that, if all the uninsured cars on our roads were to suddenly stop running, I think there would be a traffic jam so huge it would take weeks to clear.

This may be a little long, Jim, but if you want to know how and why you got charged the extra sales tax, and even how to avoid paying it:

§ 152.0412. STANDARD PRESUMPTIVE VALUE; USE BY TAX
ASSESSOR-COLLECTOR.


Text of section effective October 1, 2006
(a) In this section, "standard presumptive value" means the
private-party transaction value of a motor vehicle, as determined
by the Texas Department of Transportation based on an appropriate
regional guidebook of a nationally recognized motor vehicle value
guide service, or based on another motor vehicle guide publication
that the department determines is appropriate if a private-party
transaction value for the motor vehicle is not available from a
regional guidebook described by this subsection.
(b) If the amount paid for a motor vehicle subject to the tax
imposed by this chapter is equal to or greater than 80 percent of
the standard presumptive value of the vehicle, a county tax
assessor-collector shall compute the tax on the amount paid.
(c) If the amount paid for a motor vehicle subject to the tax
imposed by this chapter is less than 80 percent of the standard
presumptive value of the vehicle, a county tax assessor-collector
shall compute the tax on the amount that is equal to 80 percent of
the standard presumptive value of the vehicle, unless the purchaser
establishes the valuation of the vehicle as provided by Subsection
(d).
(d) A county tax assessor-collector shall compute the tax
imposed by this chapter on the valuation of a motor vehicle if the
valuation is shown on:
(1) documentation, including a receipt or invoice,
provided by the seller to the purchaser of the vehicle, but only if
the seller is a motor vehicle dealer operating under Subchapter B,
Chapter 503, Transportation Code, or under similar regulatory
requirements of another state; or
(2) an appraisal certified by an adjuster licensed
under Chapter 4101, Insurance Code, by a motor vehicle dealer
operating under Subchapter B, Chapter 503, Transportation Code, or
by an adjuster or motor vehicle dealer licensed or operating under
similar regulatory requirements of another state.
(d-1) An appraisal described by Subsection (d)(2):
(1) must be on a form prescribed by the comptroller for
that purpose; and
(2) must be obtained by the purchaser of the vehicle
not later than the 20th working day after the date the motor vehicle
is delivered to the purchaser or is brought into this state, as
applicable.
(e) On request, a motor vehicle dealer operating under
Subchapter B, Chapter 503, Transportation Code, or under similar
regulatory requirements of another state shall provide a certified
appraisal of the valuation of a motor vehicle. The comptroller by
rule shall establish a fee that a dealer may charge for providing
the certified appraisal. The county tax assessor-collector shall
retain a copy of a certified appraisal received under this section
for a period prescribed by the comptroller.
(f) The Texas Department of Transportation shall maintain
information on the standard presumptive values of motor vehicles as
part of the department's registration and title system. The
department shall update the information at least quarterly each
calendar year and publish, electronically or otherwise, the updated
information.
(g) This section does not apply to a transaction described
by Section 152.024 or 152.025.
(h) This section does not apply to a motor vehicle disposed
of in accordance with Chapter 2303, Occupations Code, Chapter 70,
Property Code, or Chapter 683, Transportation Code.
(i) This section does not apply to a motor vehicle that is
eligible for a specialty license plate under Section 504.501,
Transportation Code.
(j) The requirements of Section 520.031, Transportation
Code, continue to apply to a transferee of a used motor vehicle who
obtains an appraisal under Subsection (d)(2), and obtaining an
appraisal does not modify those requirements.

Added by Acts 2006, 79th Leg., 3rd C.S., ch. 6, § 3, eff. Oct. 1,
2006.

You also said earlier that "You don't need a title to register or insure a car in Texas" and you're sorta correct in that you can register or insure a car without actually having the title yet, but . . .

§ 501.022. CERTIFICATE OF TITLE REQUIRED. (a) The owner
of a motor vehicle registered in this state may not operate or
permit the operation of the vehicle on a public highway until the
owner obtains a certificate of title for the vehicle or until the
owner obtains registration for the vehicle if a receipt evidencing
title to the vehicle is issued under Section 501.029(b).
(b) A person may not operate a motor vehicle registered in
this state on a public highway if the person knows or has reason to
believe that the owner has not obtained a certificate of title for
the vehicle.
(c) The owner of a motor vehicle that is required to be
registered in this state must apply for a certificate of title of
the vehicle before selling or disposing of the vehicle.
(d) Subsection (c) does not apply to a motor vehicle
operated on a public highway in this state with a metal dealer's
license plate or a dealer's or buyer's temporary cardboard tag
attached to the vehicle as provided by Chapter 503.

Acts 1995, 74th Leg., ch. 165, § 1, eff. Sept. 1, 1995. Amended
by Acts 2001, 77th Leg., ch. 67, § 1, eff. Sept. 1, 2001.

And like you said, it's illegal to not have insurance, but the last estimate I heard was that about 25% of the cars on the road have no liability insurance. I know that about 25 years ago, when I was in charge of the police auto pound and we sent certified letters to the registered owners of vehicle that were impounded, we figured that about 25% of the impounded vehicles no longer belonged to the registered owner. When I discussed the problem with the folks in Austin, they said their "goal" was to get their records 98% accurate but they admitted they had never even come close to that.

 

[jinman]

This may be a little long, Jim, but if you want to know how and why you got charged the extra sales tax, and even how to avoid paying it:

Bird, you are right that the laws are a little long-winded. However, even an old guy like me can read and figure out what they say:

If you are an average "Joe" who buys a car from someone...
1. If you don't pay enough, we are gonna getcha.
2. If you pay too much, we are gonna getcha even more.
3. Auto dealers are allowed to know the secret handshake, and can
get around this law plus charge you a fee so they can getcha in addition
to the tax man.
4. Avoid all old cars you see with dealers tags because the car is probably not registered, insured, or titled. Also the driver is probably high on something and is allowed to getcha because jail is a better place to stay than
where he normally lives.

Okay...maybe I went a little overboard on my paraphrasing of the law.

 

[MossRoad]

All we need in Indiana is a notarized affidavit as to the price paid for the car.

 

[Dargo]

All we need in Indiana is a notarized affidavit as to the price paid for the car.

Exactly correct. I haven't read the entire thread to see if anyone from KY has responded, but it's my understanding that KY also goes by "book value", regardless of what you paid. I have done business with a member of KY's legislators and he told me that a fellow legislator who proposed that law several years ago brought in loads of signed affidavits that were just plain silly. For example, a guy bought a year old Lexus LS400 (remember this was several years ago) with 8000 miles on it for $3500.00. And, no, it didn't have a salvage title. The new owner just said he got a good deal on it.

Hopefully Indiana doesn't take note from Kentucky and enact the same legislation. I do know that Indiana is now closely considering enacting legislation that would require auto dealerships to handle much of the registration and license process. The idea is that it will save tax dollars that would normally have been spent at license branches. But, that cost will obviously be passed on to the auto dealers. And, I'll bet you can guess where they will pass on that cost. So, I question if that legislation will really save the taxpayer any money? I suppose it will if you don't own a vehicle.

On the prospect of the division of motor vehicles in any particular state using a book value rather than the actual paid price; I see that as ultimately unfair. When is the last time you bought a car out of a book?? Two cars (or trucks) that have an identical "book value" may vary by thousands of dollars in actual value based on their condition. In my mind, that makes the "book value" method of taxing unfair.

 

[Bird]

Bird, you are right that the laws are a little long-winded. However, even an old guy like me can read and figure out what they say:

If you are an average "Joe" who buys a car from someone...
1. If you don't pay enough, we are gonna getcha.
2. If you pay too much, we are gonna getcha even more.
3. Auto dealers are allowed to know the secret handshake, and can
get around this law plus charge you a fee so they can getcha in addition
to the tax man.
4. Avoid all old cars you see with dealers tags because the car is probably not registered, insured, or titled. Also the driver is probably high on something and is allowed to getcha because jail is a better place to stay than
where he normally lives.

Okay...maybe I went a little overboard on my paraphrasing of the law.

Jim, the "gotchas" in the system are myriad. The registration (license plate) on our Windstar would have expired the end of this month if I hadn't renewed it. I received the renewal notice in the mail the first of last month and went ahead and renewed it early; same fee as I paid last year. Then the first of this month, I received another renewal notice in the mail, but for $10 less. It really puzzled me at first, until I read the separate sheet of paper that said they made a mistake on the earlier notice and that I should only pay the lesser amount, but that if I had already paid the larger amount, I will be receiving a check for the $10 (which I have not received yet).

Wonder how many people research the law to see whether they are being charged the correct amount for registration.

 

[scott_vt]

Mornin Jim,
Gee I dunno Jim, with a man of your means whats an extra $43.75 in the grand scheme of things ?