Buying a used car from a private seller: tips and red flags?
in Business, Accounting & Taxes ·
Hey everyone,
I have a quick question. Since we’re just starting up our daycare business, we’ve decided to pick up a used car. I found a good deal on one, but the seller is just a private individual. Just a heads-up: since this is a small daycare, we aren't set up to handle sales tax/VAT—not that we’d be able to claim it back anyway. Instead, we’ll likely just be looking at the standard vehicle transfer fees. Under the current regulations, shouldn't we just be paying a flat fee based on the horsepower and the age of the car?
My main concern is whether there are any legal hurdles here. Logic tells me we can just draft a standard bill of sale, hammer out all the terms, have both parties sign (the individual seller and the authorized representative for the daycare), and then execute a bank transfer from our business account to theirs. Also, since we know the owner personally, is there any issue with setting up an installment plan? For instance, if the car is roughly $6,500, could we agree to pay it off in three installments of about $2,100? Is that considered legitimate?
One more thing: what happens if the current registration is still valid? It’s good until August, so we’d just need to transfer the title now and wait until it expires to handle the new registration.
Thanks in advance for the help.
Best,
I have a quick question. Since we’re just starting up our daycare business, we’ve decided to pick up a used car. I found a good deal on one, but the seller is just a private individual. Just a heads-up: since this is a small daycare, we aren't set up to handle sales tax/VAT—not that we’d be able to claim it back anyway. Instead, we’ll likely just be looking at the standard vehicle transfer fees. Under the current regulations, shouldn't we just be paying a flat fee based on the horsepower and the age of the car?
My main concern is whether there are any legal hurdles here. Logic tells me we can just draft a standard bill of sale, hammer out all the terms, have both parties sign (the individual seller and the authorized representative for the daycare), and then execute a bank transfer from our business account to theirs. Also, since we know the owner personally, is there any issue with setting up an installment plan? For instance, if the car is roughly $6,500, could we agree to pay it off in three installments of about $2,100? Is that considered legitimate?
One more thing: what happens if the current registration is still valid? It’s good until August, so we’d just need to transfer the title now and wait until it expires to handle the new registration.
Thanks in advance for the help.
Best,