Question on Taxes & Insurance

1073 Views 7 Replies 8 Participants Last post by stangdawg, Sep 19, 2011

spiney

Discussion Starter · Jul 15, 2011

OK I'm buying the 96 Cobra on Saturday. I'm paying $10,500 but for Tax purposes we were going to write up the sale for $7,000 because I'm tapped out and our tax here is $60/ per $1000.00 Seller and buyer were cool with that until today my insurance person through out a wrench. New rule she needs a copy of the state sales tax papers. So am I screwing myself insurance wise if I tell the insurance I'm only paying $7K instead of $10.5K? I'm financing $8K because that's all the bank will do on a 96. Need opinions or experience fast. I do realize that if I buy it and 10 minutes later someone totals it I'll never get near what I paid. High Book value is $9750. The bank said fair trade value is $7850.00 Thanks, Spiney

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Brutal Metal

· #2 · Jul 15, 2011

I've Never heard of an insurance ageny butting in with the sale price of a used car? That's messed up, why is it their business how much you paid UNLESS your trying to acquire collector insurance like I have? Go online and shop a quote from Travelers and Essurance for a 96 SVT cobra with the coverage you want!:bigthumbsup
Get what I'm saying? tell that lady to take a hike!

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2oo5GT

· #3 · Jul 15, 2011

+1, that's strange. usually insurance pays out what it's worth, not what you buy it for. Just like if you get a Ferrai as a grad present...so if you total it, they pay you nothing since you didn't buy it, it was a gift?? I would ask her some questions pertaining to this. If they say your car is worth $10K but if you buy it for $7K (on paper) are they only going to give 7 if you something bad happens, see what they say. Def doesn't sound right, if that's what they are saying.

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ClubGitmo

· #4 · Jul 15, 2011

1) If you're willing to go down to $7k, why stop there? Write $50 on the bill of sale for all it matters.

2) What you pay/finance/give sexual favors for doesn't effect the insurance value. Insure it for what you what...

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2Manystangs

· #5 · Jul 15, 2011

you can't write 50 on the bill of sale, most states would still bill you the tax at the "book value" of the car...they caught on to that game years ago
Now, what the sale price and value of a car is are two different things, if you want it insured for more than book, then tell the agent you want to pay extra for "stated value"...it's a minimal fee over the base
And by the way what you are doing is considered fraud, so why risk it for $180 and have issues with your insurance company?
I learned in my life any time "I try to beat the man", I wind up paying alot more in the long run.
As a side note, make sure you write the tax off on your next years income tax.

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Yadkin

· #6 · Jul 15, 2011

You didn't say how old you are but if you're under 25 the theft/collision insurance will kill you. Better to take a personal loan for the car, take the risk, drive sane, don't park in bad neighborhoods and use the money you save to pay the loan down faster.

With just the state mandated insurance my agent (Nationwide) tells me that the premium is the same regardless of the car's value.

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yellasnake

· #7 · Jul 17, 2011

So, instead of speculating about it, have you asked what the tax info is used for? Unless you are getting insurance for a specific value, you will get bluebook replacement price if it is totaled. However, even then you will have to deal with the company trying to short you on the pay off.

I have purchased several cars over the years and have always had to provide a purchase price, but it was for statistics info only and not used to determine the pay off of the car.

Besides, from the looks or your bluebook values you already screwed yourself by paying more than it is worth.

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stangdawg

· #8 · Sep 19, 2011

Post is a few months old but wondering what the outcome was?

Get a Hagerty Insurance Collectors policy. Full coverage is $210/year for me and my wife as drivers. Car is driven under 1000 miles (way under) though and stored. I think you also MUST have a vehicled already for each licensed driver in home to qualify or they'll assume you are doing more than occasional driving.

I got a "stated value policy" and had to provide images of all sides, interior, and under hood of my car. Value has nothing to do with sales price.

Assuming the car is in good shape then take lots of photos and demonstrate the condition.

If this is a daily driver than not sure how it would work as now it's regular type insurance.

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