Hey there folks!
I have a little side gig renting out a few cars on Turo (and I also used ot rent them on another car-share platform called Fluid as well).
I have had a fairly high turnover rate, some cars are personal vehciles and some were rentals. Just recently I already approached my "limit" of 5 cars per year in California.
In January I sold a ratty old Corolla that suffered from a timing chain failiure (Fluid rental), then in Febuary I sold one of my project Ford Ranger EVs to a guy out of state (yes, a fully electric Ranger, but that's a topic for another post). In March I sold my super clean 02' Ford Taurus (Fluid rental). Then just in April I sold one of my "personal" rigs, a 1997 Rav4 (AWD 5 speed), and then I just sold the 5th one last week, a 2011 Audi A4 that I purchased in January (Turo rental). I am always on the lookout for new cars to add for rent, although with Covid going on things are a bit slow right now, so I probably won't add anything new too soon.
However, I've recently been looking at maybe getting a classic 60s-70s project vehicle to fix up a bit and my plan is to eventually sell it in a few months time, hopefully for a bit of profit. Or eventually I may end up with another rental car for Turo, who knows. Anyways, I'm getting off topic...
My big question is, has anyone here ever gotten into car flipping and surpassed the California "5 vehicle limit"? I've always registered all my cars, paid sales tax, etc. But I'm unsure of what happens if I sell too many cars. Will the state fine me? Prevent me from registering new cars? Some other enforcement measure? Or do they just do nothing?
Thanks in advance for any guidance.
P.S.
Here's a link to my Turo profile if anyone wants to check it out. Not much on here now, just two cars. My 2017 Mustang Ecoboost convertible (purchased specifically for renting out), and my Daily driver 2014 Fiat 500e.
https://turo.com/us/en/drivers/1568527
As long as you are paying taxes and you properly register them the state does not care. If you try and duck under on taxes and they find out they will find you especially if someone complains about you.
While I politely disagree with Wearymicrobe, I think you'll be fine. I sold 9 one year in L.A. and nobody cared. I started buying stuff cheap to tinker and turn for a profit. A few of those were trailers, so maybe that is what saved me.
The law does limit you to X vehicles per year without a dealer license, but I also don't think there is anyone at the DMV who is paid to count how many vehicles everyone sells. Keep in mind, my experience was 15 years ago and most stuff could be done on paper. That may be easier to monitor now if things have gone more electronic.
If you pay taxes on a car and register it, the state should not care how many you sell. However, these laws are passed to coddle auto dealer lobbyist that grease palms of our legislators.
So I need to be clear here. You sell 6 cars maybe 7 that year no trouble. Even more as long as its private party who cares they just want a proper tax collected.
What California does not want is dealers operating out of a home or private residence. They REALLY have a hard on for catching people like this. Not sure if it is EPA driven or if people have been flipping cars with illegal smog but they are not screwing around right now.
There is a limit of 5 cars/year in Wisconsin before you need a dealer license and one year they sent me a letter with an application after the 5th.
I suspect the CA DMV is a bit overloaded at this point to care much (unless it's an automated function). They figured it was a good idea to ignore the RealID requirements for about 10 years, until it came to bite them in the ass. I think there is an extension now (was going to be October), but it's still going to be a bit of an S-show I am sure. Oh, and the CA DMV, in the state that is home to the super high tech silicone valley.... cannot take credit cards! (they do use some sort of outsource for the website though).
In reply to aircooled :
They don't wanna pay the swipe fees on the credit cards. Colorado didn't take them for a long time either, until they decided they'd just charge us the swipe fees.
