Inter-state car buying

June 3, 2006 7:44 PM

This might sound ditzy and hair-twirly, but bear with me. The short: my parents came into some money, and want to gift me with a new car to replace my clunker. Thank you, parents. I live in Minnesota; they're in Virginia, but because of scheduling conflicts, I won't be able to visit them or vice versa. What's the easiest way to do this?

The most obvious solutions seem to be a) have them purchase the car in Virginia, and then find someone to drive it to Minnesota (which isn't likely, as I can't think of who would be able to do that at the moment) or b) have the car shipped (as per this thread) to Minnesota. Is there an easier way I'm missing? I have zero car knowledge and don't have the funds to purchase one here myself and have them pay me back (if that could even be worked out). Can they somehow buy a car from a dealer here without being physically present, or is that asking for trouble? They want to purchase the car within the next month or so. Thanks for any advice.

posted by Zosia Blue to Travel & Transportation (20 answers total)

Coordinate with them and a local dealership to purchase the car. That way they can buy it and you can drive it now and not later. Then drive it home to show it to them and thank them with a very nice gift of your own when you have time.
posted by ChazB at 7:46 PM on June 3, 2006 [1 favorite]

How much money are we talking? Because they can gift you $22k w/o tax penalty.
posted by nathan_teske at 7:47 PM on June 3, 2006

Pick a car, have them send you the money.
posted by Brandon Blatcher at 7:47 PM on June 3, 2006

I'd like to add that I'm not sure how it works in the states, but I know that here in Canada it can be easily done. Also, I have a friend that went to Stanford but her parents lived in eastern Canada. They bought her a car at a dealership in SF without leaving their home in Canada.
posted by ChazB at 7:49 PM on June 3, 2006

Are they paying cash, with no loan?

If so, I'd suggest finding a car you liked, with a budget your parents can accept, taking a photo of the car and making sure your parents like it, and have them send a cashier's check or wire funds to the dealer to pay for the car.
posted by effugas at 7:49 PM on June 3, 2006

Response by poster: They're shooting for a new-used car, so I think the maximum price would be around $13,000. I don't think they're planning on a loan, but I don't think they want to drop all the cash at once, and were planning on car payments, so I think them wiring me money would be out of the question, unfortunately.

I'm looking more along the lines of what ChazB suggested - the ideal solution would be to coordinate with a local dealership up here somehow, but I wasn't sure if that was something that could be done, or if there'd be more room for shadiness and error in that method. My 72-year-old Dad keeps suggesting that he'll buy it and drive it out here, but I'd prefer to avoid him making that trip due to strains on his health. (Once he gets an idea in his head, it's hard to talk him out of it, so I'd like to present him with a viable solution.)

Thank you for the quick suggestions so far! I do plan on a roadtrip in the new car once we work it out. My parents are generous folks.
posted by Zosia Blue at 7:57 PM on June 3, 2006

I don't think they're planning on a loan, but I don't think they want to drop all the cash at once

What?
posted by geoff. at 8:02 PM on June 3, 2006

Response by poster: Sorry - I'm starting at negative zero knowledge when it comes this sort of thing. Should've done some prelim. research before I asked the question. \Basically, they have enough money at the moment to add an extra car payment, but they don't have enough to pay for a car in cash. Is the "car loan" terminology just applied to any automobile transaction which isn't paid in cash? Either way, what I mean is: no, they're not paying in cash, and plan to do car payments.
posted by Zosia Blue at 8:09 PM on June 3, 2006

Payments of any kind indicate a loan in a situation like this. They loaned you the money for the car, you bought the car with that money, and now you're paying them back. Its definitely a loan, and you're likely paying interest. That said, if they came into some money, I'd think they'd want to pay cash. I'm a little bit confused as to why you'd buy someone a car with taking out a loan if you couldn't afford it completely immediately and they didn't absolutely need it.
posted by devilsbrigade at 8:13 PM on June 3, 2006

Response by poster: I'm not sure, either, devilsbrigrade, but this is how they want to do it. I suppose they have their reasons, and I've stopped questioning their financial quirkiness a while ago.
posted by Zosia Blue at 8:19 PM on June 3, 2006

Response by poster: Oh, so to clarify my question. Let's go with these premises: my parents are buying me a car. They're not paying in cash. What's the easiest way to purchase the car when we live in different states?
posted by Zosia Blue at 8:28 PM on June 3, 2006

To add: At least where I've lived, taxes are paid at the highest percentage. Minnesota has a higher tax than Virginia, and even if you buy in VA and ship to MN, you'll still have to pay at the rate of 6.5% (either 6.5 % in MN or 5% state + 1% local in VA + 0.5% for MN additionally). Basically, don't decide where to purchase thinking of any tax breaks, because that's not the case (I've seen friends try to drive to Delaware before because they have no sales tax, but ultimately get assessed by their home state instead).

As for how to purchase, they can always make a deal and do a test drive at their local dealership. Since most are somehow affiliated with the national brands, I'm sure that to make the sale, they'll find a way to make delivery for you at your local dealership or distribution point.
posted by galimatias at 8:29 PM on June 3, 2006

Have them take out a loan with the local credit union and then transfer the funds to the dealer.
posted by geoff. at 8:36 PM on June 3, 2006

My retired dad used to do Dealer Exchange driving, or DX'ing, more or less for entertainment value. Two auto sellers need specific cars in places where they aren't, so they pay someone a bit to drive one car to another place, hop into another car, and drive that one to another spot, until they end up back where they started. I think, when my pop did it, it was mostly dealers in the same metro region, so you'll have to check to see if a DX run can be arranged over the longer distance.
posted by NortonDC at 10:37 PM on June 3, 2006

Galimatias - I think the tax is just assessed by the home state period. The state where the car will be registered. I bought a car in Connecticut, and the dealer seemed genuinely surprised how low my taxes were going to be (I live in Virginia).

Why don't you just walk into a dealership and ask how they could sort this out? I'm sure it's come up before, and while dealers are shady, they're very helpful when they're after your money. I'm certain they'll work something out.
posted by crabintheocean at 10:52 PM on June 3, 2006

Oh, and I'd really try not to have them pick a car for you without you there. I mean, you want to try it first right?
posted by crabintheocean at 10:53 PM on June 3, 2006

If they're not paying the full amount in cash, it would probably be difficult for them to arrange finance with a dealer outside their home state but local to you, and anyway, the interest rate would be higher than a personal loan.

As geoff said above, they should take out a personal loan (and should shop around for the lowest possible rate) so they have a lump sum to pay/transfer to the dealership from which you buy your car. Then you are effectively a cash buyer and should be able to negotiate a healthy discount on that basis.

If you're not comfortable negotiating, take along someone who is so you can get all excited about the car while your sensible friend talks money with the dealer. A friend and I did that recently - she was so thrilled with the car she'd have signed anything, but I, having nothing personal invested in it, did the money talk and got the price down.
posted by essexjan at 12:48 AM on June 4, 2006

How's your credit? I was in a similar situation (my parents were in NJ, I was in OH), and IIRC when we agreed on a car, they provided the funds for the down payment to me and I went to the dealership and purchased the car in my name. Of course, because I financed the car through the dealer, this required that I have sufficiently good credit to qualify for low-interest financing - if you don't, then this probably won't work for you. Also, I'm not sure if you can get dealer financing for used cars, but I assume that you could get a bank loan just as easily with decent credit.

When I received my first car payment bill, I changed the billing address to my parents' address, so that bills would be sent there.

I am a very, very lucky girl. Don't forget to thank your parents; you're very lucky, too.
posted by amro at 6:52 AM on June 4, 2006

Response by poster: Thanks for the advice so far! Amro, I have a great credit, so that sounds like a possible option. I have a few dealerships lined up to call tomorrow, too, so I'll see what they say.
posted by Zosia Blue at 9:04 AM on June 4, 2006

How much money are we talking? Because they can gift you $22k w/o tax penalty.

Actually, it's $24K in 2006.
posted by ikkyu2 at 11:01 AM on June 4, 2006