Tips on Buying Cars: Car title registration in CA, california sales tax, auto insurance policy

Question
QUESTION: I live in Minnesota, but am working in Los Angeles till the end of the year 2008. I purchased a car in Orange County, CA, September 22, 2008. California sales tax was included in the purchase price and the entire transaction was paid with cash, so there is no lien against the vehicle.

I have a MN driver’s license and I have already put this car on my MN auto insurance policy. The license plate tabs expire in December of 2008, before my drive back to MN. Since the timing is tight with my return to MN, could I register the car in CA for now and then re-register it when I return to MN? I understand that if the car were to stay in CA, it would require my auto insurance policy to be transferred to a CA policy (which my insurance company can do). Do I have any grace period for providing CA insurance since my MN insurance policy is already covering this vehicle? (The car will be driven back to MN as soon as my work is completed.) Or do I have to have a CA auto insurance policy in place when I go to register the car at a CA DMV?

I have also heard that if I wait to transfer the title to my name and register it in MN, I’ll have to pay MN sales tax on the vehicle as well as the original CA sales tax I’ve already paid.


ANSWER: which,

Thanks for your question.  The answer to your question is a little complicated.  To answer your first question, yes in order to register the vehicle in California, you would have to have California auto insurance prior to registering it.  There isn't a grace period except for 30 days from the last day of the month in which your registration goes out on the vehicle.  That means that you have 30 days from that period to get the registration up to date, whether that be in MN or CA.  For your second question.  You should not have to pay taxes in MN when you register the vehicle in MN.  You will simply have to show proof that you already paid taxes in CA when you purchased the vehicle, which a Bill of Sale can do that for you.  Now, with that being said, you will have to pay registration and title fees in the state that you register the vehicle in.  That means if you register it in CA and then again in MN, you will have to pay both states registration fees, which are usually a couple hundred dollars for each state.  Now, I am assuming that the vehicle is in your name in California.  The reason I say that is that you stated that you would have to register it in your name.  If the vehicle is not in your name in California, then yes you will have to pay sales tax in either state to get it into your name, unless you can proof that it was gifted to you.  If it was gifted to you, then you will have to pay the gift tax, which in most states is only a few dollars.  It just depends from state to state.  

Now lets address the insurance issue.  The insurance issue is dependent on which state is your permanent residence is.  If your permanent residence is in MN, then you technically only have to carry insurance in the state of MN, not in CA.  That determination is made by the laws governing that state.  For example the state of California may say in its constitution that if you reside in the state for 30 days then you are considered a permanent resident.  It just depends, and I don't have that answer for you.  The simplest thing to do to answer all of your questions is to call the Department of Motor Vehicles in the State of California, and ask them these questions.  They will be able to tell you all of the information that you need.

I hope this helps.

Thanks - JB

---------- FOLLOW-UP ----------

QUESTION: I forgot to thank you for your time on my first questions, so will do so now! Also wanted to clarify that the title is not in my name, yet-the application for transfer by new owner has not been processed, and I didn't realize that had to be done in 10 days. May I still transfer the title to my name at the CA DMV, and then register the vehicle in MN when I return? Will I be charged a fine for the transfer of title not be done in the 10 days? Thank you again so much-I know this must sound convoluted!

Answer
Katelin,

Thanks.  To answer your question, yes you will have to transfer it into your name first in CA and then transfer the tags to MN. That will make it so much easier on you.  And your question does not sound convoluted.  That is why I am here.  If you have any other questions, please feel free to ask.

Thanks - JB