Selling a car between family, gift VS written value?
 

quick question regarding the sale of a car, first is selling a car between family members any different than a regular private sale?

and second, i've heard of people using the "gift" form or whatever, if this form is used to transfer the title of a vehicle if said vehicle is written off do you still get the blue book value?

ive heard that if in a private sale if you sell a car for much lower value than blue book that if the vehicle is written off you only get sale value?

No difference.

Purchase price ≠ market value.

You will get book value.

so is transferring a car via these gift forms a common practice?

Alot of misconceptions here, but the gift form is exactly what it entitles. Essentially it is used when the vehicle was gifted to its recipient and therefore no tax would be charged on the sale. There is no difference in selling the car to a family member or to a stranger, however if you do choose to use the gift form, theres a small field that asks the relationship of you and the buyer which makes it more believable if you're gifting to a family member.

The sale price of the car should not have any relation to the insurance payout in event that it was written off. The insurance payout is usually dependent on market value to buy a similar/identical vehicle.

^

yea thats about right

gift just saves you from getting taxed

but if you get caught "gifting" cars to strangers, then you're gonna get reamed so hard XD...

most people undervalue it or something, but gifting is too much :P

gifting between family is fine though?

In most cases yes.

ICBC runs tons of data mining apps, so does CRA. You can gift to strangers all you want, if you have nothing else in hiding. But when you get a tax audit etc. chances are you will spend a heck lot more.

I remember reading a news article where someone sold a car to their family member, but marked it as a "gift" to avoid tax, and somehow they got caught and charged.

It was quite a while ago, and i can't find the article

avoid "gift"

just do it regular transaction, but list the value of the car lower than actual.

Say, $1500 on a $7000 car. When they ask for the reason why it's so low, just say one of the cylinders are misfiring or some reasonable malfunction with the car.

5% of that or whatever of $1500 is not much, and saves you the hassle of gifting

if your actually BUYING a car, then just declare a lowered value

but if your transfering ownership to someone within your immediate family, then by all means, write it as a gift.

that option is there for a reason, but if your just trying to save some money, then do it on your own discretion.

"Gift" if it is a gift or if it is reasonably beleivable. *reasonable is subjective so be careful* By that i mean, don't write it as a gift if the car's book value is like $70,000

I think declaring a lower value would be the better option.

Family member, Gifting is FINE.
The car keeps it's value, and all that it means is that there was NO MONEY INVOLVED in the transaction. Of course they would never know.
Writing a lower value is a stupid idea because if it gets written off, that family member gets screwed on value.

Gifting to random people is a stupid idea.
Writing a lower value itself is a stupid idea when buying. If you can't afford the tax that comes with the car, don't buy it. Don't dig yourself a hole if you somehow write it off/get it stolen.

LOL.. book value. You'll get what ICBC calls "fair market value", which is neither fair nor market value.

Somewhat related to this topic. I read on a couple of other forums I'm on that tax on private car sales is going up, to 12% when the HST takes effect (it's currently at 7%).

thats because right now you only pay GST.

when HST kicks in, there is only one tax, and do you think the govt is going to give up a chance to tax you?

fliptuner you heard right

Agreed.

It depends. I've heard a lot of stories of people getting more from ICBC than what they paid. I totalled my 5 month old car and basically got what i paid for it PLUS they give you the pst on the assessed value + GST voucher.

As I said... neither fair nor market value. Either too high, or too low (usually the latter). And that tax voucher is only good at a dealer... not a private sale. So you end up paying more for the replacement car than you should.

Great deal, thanks ICBC.

If the seller is willing to "gift" you the car. If ICBC does an audit, will the seller or the buyer get reamed by ICBC??

Seller

whats the point of listing the car lower? u are still lying. either gift it or list the real price. and only idiots would list the real price

What do you do if the car was traded for a service?

ie. landscaping, plumbing, construction in trade for a car

no BJ's :rofl:

Correct me if I'm wrong. If I purchase a car for 10,000 and write the value of the car as 3000. If my car gets written off, is ICBC giving me "fair market value" or the value on paper, in this case 3000..