Flipping Cars For Profit – It’s Illegal!

Flipping Cars For Profit – It’s Illegal!


Hi Don Massey here I’m a licensed Colorado
car dealer In this video we’re going to talk about flipping cars. You may have heard that
before, the term “flipping cars” You’ll see ads on the internet where people are selling you manuals or
programs on how to “flip cars” and make a lot of money. Let me tell you
a few things about this term “flipping cars”. First I want to tell you it’s ILLEGAL. Let me say again, in case you have
misunderstood what I said It’s illegal. You cannot buy and sell
cars in any state in the US for-profit without having a
dealers license. You don’t believe me, call your state
licensing board. You can hear all kinds of things on the
internet. You can read all kinds of things on forums about…. Well flipping cars is okay. You can buy
and sell five cars a month or five cars a year whatever you can sell limited
amount of cars and that’s okay. Also I’ll read forums and
they’ll say they’ll be people saying things like It’s not right for the state or the
government to keep the little man down to keep me from making little bit money
on the side. You know, playing that “whoa is me” poor me I can’t get anything because the state or the government won’t allow
it. Playing that role at being the downtrodden. Doesn’t matter what role you want to
play the LAW is the LAW! and flipping cars is illegal in every
state It’s a violation your state laws Let give you an example of one…. because
often when I hear things like this or talk to people on the phone when they
call me they’ll say my state says I can buy and sell five cars a year or I can buy and sell four cars a year.
Let’s go into and look at this more detail. Right here I
have an answer to a question from the
frequently asked questions site for the Georgia Department of Motor
Vehicles State website. Here’s what the question was…”I
thought I could sell up to five vehicles in a
year before I had to be licensed. I’ve had people call me and tell me that the
state says I can buy and sell five cars Here’s what they say. The five cars per
year statement has been misinterpreted by many people. The origin of the five-car phrase is the used motor vehicle dealers and
use motor vehicles parts dealers Registration Act OCGA 43 – 47 – 217 – a states… that the sale five or more used
motor vehicles in any one calendar year shall be prima facie evidence that a person is
engaged in a business of selling used motor vehicles. This means that evidence indicating that
the person has sold fiver more used vehicles in any one calendar year can be used to
show that a person is engaged in the unlicensed practice of used motor
vehicle sales What they’re saying here is legalese. It’s a legal statement. It’s saying… that
proves that if you buy and sell more than five a
year that is absolute proof prima facie evidence on its standing
that you’re violating laws the state of Georgia Does that mean you can buy and sell
three No, you can’t buy and sell any. Let me read the next statement. And this statement should be read in
its context…..that I tried to put into there, for you. and should not be misinterpreted to mean that a person may sell up to five vehicles in the year before becoming licensed. My state, Colorado, THREE. I talked to them. They said that’s prima facie evidence if you sell and buy more than
three a year then you’re illegal for sure. Can you buy and sell any cars a
year for profit? No you cannot. Of course there’s a question about what if I buy and sell my own? That’s fine you’re not buying and
selling for profit but if you’re buying and selling for
profit… flipping cars is illegal. There’s another area of flipping cars you be well aware of too. You may hear this “Open title” an Open title. What this is someone buys a car. They’re in this business;
illegal business of flipping cars They’ll buy a car and a course on the title
when they buy the car you’re supposed to sign on the title. There is always a place for the seller and the buyer to sign. These people
though that are in this business for flipping cars want to get around a process so what
they’ll tell the buyer, the seller, excuse me, they’ll tell the
seller just sign it and all sign the rest when I go register the
vehicle or they don’t do anything they just say it is all you need to do is
sign the title so it’s a blank title. It’s an “open title” has no buyers name on it. Then they’ll take this car they’ll put on Craigslist and they’ll sell it on
Craigslist. If the buyer is well-informed the buyer may say, well do you own this car no I’m selling it
for my brother-in-law but anyway that’s another issue, that’s a lie but they they have the title but not registered the car that means they don’t go down to
the DMV because they didn’t put their name on
the title and register they don’t pay the sales tax they don’t
pay them registration fees. People who do that and if that’s you, if
you’re flipping cars, you are violating the state tax laws in
your state. That’s called tax fraud also you’re not
registering the car, you’re not licensing it that’s also bypassing the state laws for registration and collection of
taxes on your car. My state for instance they collect the
property tax when you register the car and you pay that every year. So you can see that there are several
issues, big issues with flipping cars Folks, I’m telling you can’t do it legally
and you can’t play the role that I’m the poor person, why can I do this? You can’t. You just have to understand it Hope this video has been of some help. I
know you probably didn’t like to hear what I said, especially if you’re in the
business of flipping cars or been thinking about it Or maybe you’ve bought one of these programs on the internet about flipping cars for profit. But you go ahead and do it if you wish
but the consequences of violating the laws of your state could be great. If you don’t believe what I’m saying, if you
believe what you read on the internet or believe what you purchased you don’t believe what I’m saying, CALL
your department of motor vehicles and talk to a compliance officer in
the dealer licensing board or whoever licenses the dealers in your state. Talk to someone who enforces the rules..
anyway that’s it, thanks, have a great day and again good luck in any endeavor you give your effort to. I wish you well, thanks a lot! in

About the Author: Michael Flood

36 Comments

  1. The worst thing that can happen if you get caught is that they'll make you pay on the sales taxes for the cars that you sold

  2. That's coming from a guy that owns a car dealership. He thinks people are cutting in on his profits. Why pay the state for taxes when that same vehicle may have been taxed 10 times before. The states collect enough money on cars. Just my opinion

  3. When I was kid I ran into this one year, it was six  cars, We were able to prove that I was definitely not doing it for profit ! I was just really bad at choosing good cars. and I hadn't been jumping title and had been paying tax on them.

  4. no it is not illigeal to flip cars at all its done all the time and when ask about it at the tn state capital yes it is llegal

  5. In South Carolina from the DMV website:
    "As a licensed dealer, you are not required to sell a specific number of vehicles to maintain your license. However, you must have a dealer license if you sell or attempt to sell more than five vehicles in a calendar year."

  6. The truth behind this video is that Mr. Massey has something to sell you and is trying to scare you into using his services.  Look at his other videos and follow the money.

  7. key words "for Profit" you shouldn't say you can't cause plenty of people do. the only agreement between buyer and seller is what the write down. sell it for 1500 but write less than what you bought it for.

  8. Wtf my uncle does this this guy just doesn't want people taking his first profit the government does not enforce this law

  9. Most flippers that are really doing this for real profit get a dealer licence..  Your not making much money flipping 2-5 cars a year..

  10. If a friend sells you a new car for $2000 you cant resales it for more? You pay a sales tax on the vehicle so the government wants you to sale it for more. My friend flips cars all the time. That means every individual car out there would half to have a set price that only can get lower. I dont see any used 80's cars for 200 bucks in perfect shape with a perfect running motor yet. You 
    scammer.

  11. Thanks for the upload, Don. Very informative video that answered several questions I had.

    Tons of misinformed people in the comments, or people who just didn't understand the point of the video. Half of them assumed you owned a dealership just because you said you were licensed, lol.

  12. Would it still be illegal to buy cars, register them and pay their taxes, then sell it? Very informative video by the way!

  13. At first I was upset when I found out that Illinois requires a dealer's license until I did some research into why. Now I understand that requiring it is a VERY GOOD THING, not just a money grab.

    Most people don't realize that these laws not only bring in some cash for the state but they protect the consumer from buying junk. Licensed dealers have a difficult time taking flood damaged cars with salvage titles and re-selling them as clean but unlicensed "flippers" can and will do exactly that. Most of the water damaged hurricane Sandy vehicles were re-sold in this manner, NOT through legit dealers.

  14. what a idiot read this idiot and read it more than one time clearly you dont know what r you taling about http://wisconsindot.gov/Pages/dmv/dlr-agents/busns-lcnse/retaildealerlicense.aspx

  15. Donald duck? You only have to pay taxes on the car if you plan to register it. So if I buy a 1970 Chevy, rest or it and sell it who's to stop Mr. One that truck has no title. You are saying if you buy a project, or parts car that you have to pay taxes on it. What if you buy a car for $100 take the Signed title and head straight to the junk yard. You then scrap it for $250, I made a profit by selling the car. Junking cars is 100% legal. Tell me its not. And you demonize flipping cars why? You call it a scary name like curb stoning, like they are drug dealers or something. Are you a self made businessman? If you are then you know you broke some rules to get what you want. Arnold Schwarzenegger said in order to get ahead on life sometimes you have to break the rules. Long as its not hurting anyone what's the big deal. If the car you sell is 100% safe and 100% worth your asking price and the buyer is happy with the car, who hurt? Who lost, state will still get the taxes on the car when the buyer registers it. They also got the sales taxes on the parts you may have purchased. Everyone wins. So what your vendetta against someone buying a cheap fixer upper and selling it to put diapers on his kids butt and food on the table. Fixing cars is honorable, being a good salesman is honorable if you are honest Tell me what the moral issue? You are trying to sell your product. Nothing more nothing less. Anyone with an IQ can see that. I don't fault you because you do what you have to do. But your kinda fabricating something to sound worse then it is for your own interests. You say " don't shoot the messenger" but why are you even the messenger. I know why. But you won't really say it.

  16. I understand, I don't flip cars and now I won't due to the law, but I never knew it was Illegal, maybe the states should make it more known to the people, because I never heard of it till your video, anyway thanks for educating me!

  17. Then why do people sell cars on Craigslist? Are they illegal? Is Craigslist illegal? If so then why is Craigslist assets and net worth is over 400,000,000 million dollars?

  18. Mr. Don, Glad i came across your video! I know just what to do now! I have a kind of personal question, if you dont mind me asking. What is your education background? Did you attend business school or did you learn the business by yourself over the years? From looking at the previous comments i see you have a book on buying and selling, ill have to check it out.

  19. My dad has been doing it sense he was 21 and he's 43 now and never had any trouble we ever build dirt race cars out of old Chevys we flip a car bout every week…

  20. Let's get to the idea behind it all… If your making money as a business pay your share of taxes. If you want to be a dealer get a license, yeah it is a hassle. This does protect the guys that are legal and are more apt to taxes. HOWEVER, does not make them any more responsible to not rip folks off.

  21. This guy keeps saying flipping cars does not affect his business because his licence is for 'wholesale'….of course it affects your business, If people in the market for a car are heading to 'the flippers' and not a dealers then surely the dealers aren't coming to you to replenish there stock….

    stop repeating your comment that it does not affect your business!

    The bottom line is your business is totally affected because consumers can buy cars for less than you can supply a dealership for at wholesale! YOU ARE FLIPPING CARS! YOU JUST HAVE A BIT OF PAPER SAYING YOU CAN DO IT!

    Your cars are no better than a car i sell, if anything head to head your cars would more than likely be unsafe for consumers. why? I'm a fully qualified auto technician.

    The only real difference is your legally responsible for any issues with the cars you sell, so if some one was to die due to a faulty car then you will end up in court when been chased for compensation by the dead guys family (which your insurance would pay) so in effect you don't have a car dealer licence, you have a licence to kill.

    At least i know every car i sell is road worthy and safe, i will sleep well tonight Don, will you?????

  22. In the state of New Jersey, as long as you pay all the fees of purchasing a car (title, register, taxes, etc.) you are legally allowed to buy and sell as many cars as you'd like without a dealers license. The only rule is that you can not have 2 or more cars being displayed on a property because at that point you are considered a dealer, which would require a license. As long as you are only dealing with one car at a time and paying all the required fees, it is legal. So the information in this video is not true, at least in the state of New Jersey. (He did say it is illegal in EVERY STATE, which is not true.)

  23. Do you think there is any benefit to buying an existing car dealership corporation certificate if its in good standing VS starting from scratch?

  24. why would it be illegal for anyone to sell anything for a profit that's what everyone that's in sales do. that would like me having a yard sale and someone comming on to my property and saying I can't do that, that's obserd. see it's each individuals job to protect each other not the government. once you delegate the responsibility to someone else to protect you like our government for example it's going to screw alot of people that are just trying to survive. I don't flip cars but was seeing what this is about because I know people who do and it's crazy to say you can't sell property that belongs to you for a profit because the government can't control it think about the problems having the government control everything they screw it up Everytime.

  25. Auto dealers have a massive lobby that make sure State's act in their behalf instead of the people's. If a person buys a car legally, invests time and money into fixing it up adding more value to it, then sells it for a profit (the very definition of free market capitalism) he is now a criminal. On the other hand, dealers buy the same car, does nothing to make it better then sell it to some low income person with a "no credit check" loan at usury interest rates. That, my condescending friend, should be criminal!

  26. I live in Washington State. Is there a 'minimum' of cars that you are required to sell (each year) to have, or maintain, a dealers license? Thanks.

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