Selling a Bike to dealership for Tax free trade in before selling privately

gixxer_flexx

gixxer_flexx

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I know the title might be a little misleading, and the story is semi-long but I will try to keep it simple because i need some clarification.

So I went to see a bike (private sale) and the owner advised me that the way he wants to do the sale is to sell it to a dealership and then i purchase the bike from the dealership. As in the dealership will be the legal owners for a short time and then they transfer it to my name when i come in to sign and pay. I have spoken to the sales rep at the dealership and he advised me the owner is doing this so that he can take advantage of a tax free trade in (I believe thats what its called, could be mistaken) where he trades in a vehicle and doesnt pay the tax on the vehicle he is purchasing.


Now i have a few questions.

1) Does this process seem ok? Ive never bought anything from a dealership and certainly haven't heard of anyone doing this before. A little uneasy about the whole process, but at least the dealership is a major brand name and not a mom and pop shop. I would imagine more people would do this because often people sell bikes to purchase family cars, so why wouldnt more people do this? They dont know about it or am i just out of the loop? or is it a dealership special?

2) Sales rep told me i would be paying the taxes on the bike when i pay the actual amount of the bike and they will then give me the ownership and all i need to do is go to MTO to get plates. I just want to make sure i will not be asked to pay taxes AGAIN at the MTO, when i paid them initially at the dealership.

3) The vehicle currently has a lien. The dealership said they cannot take ownership as a business until the lien is paid off so there is 0% chance that I would have to worry about an existing lien when i receive it from the dealership. I told sales rep that i would like a written confirmation from the current lien holding company that it was paid off before i buy to make sure i dont get screwed somehow.


I think thats about everything, i tried to keep it short lol.

What do you guys think?
 
Sounds legit.

I have done a three-way trade in before to save tax. I bought a bike in Waterloo from a dealership but they didn't want my trade-in (K75C), I was able to trade the bike at a dealership Burlington, they wrote up some paperwork and a cheque for the Waterloo dealership for the value of the trade-in. I saved the tax and didn't have to deal with wanker tire kickers.

I'm not sure what the upside is to this game for the dealership unless they made a ton of money off your friend, but that's not your problem.
 
All I think the seller wants, is to pay in taxes the difference between the purchase price of his new bike and the trade in value he gets from his old bike ie new bike 10,000, trade in 5,000 so he pays the tax on 5,000.
 
I guess the downside for you is you'll have to pay the full amount in taxes, cough cough
 
Damn I haven't heard of anyhting like that. Pretty smart in order to beat the taxes. Is there any chance of getting in trouble for doing something like that?
 
Are you me?? I'm buying a bike from a guy, and the plan is to do the exact same thing. You just made me think though, I was going to give him the money, but I have to give it to the dealership. He's my dad's neighbour though, so I'm not too worried about getting screwed.
 
You're justing going to pay the taxes on whatever they sell it to you for rather than saving a little on a private sale.
Not worth it, unless it's a steal of a deal.
 
The first guy saves a bunch of tax, but they just get transferred to the second guy. As pompey stated, the downside is the second guy can't declare that he purchased the bike for $1 to beat the taxes. Whatever happens the goverment is getting their 13% on the full price of the new bike, this just redistributes who pays.
 
Mina said:
You're justing going to pay the taxes on whatever they sell it to you for rather than saving a little on a private sale.
Not worth it, unless it's a steal of a deal.
Click to expand...

I think you need to consider this as well... sounds like everybody has some interest on this deal, but you will pay 13% taxes... on whatever they sell it to you for.

Do you really think you can show up, ownership in hand, and the MTO will give you plates without charging anything (taxes)? How can that work out???

When you buy from a dealership (any dealership, car or bike, in my experience), they go to the MTO for you, you just show up at the dealer to pick up the vehicle and all the paperwork ----- and zooom! out of there for a ride...

If they are asking you to go to the MTO by yourself, exactly how will you avoid paying taxes?
 
Yes, this is an accommodation sale and I've done it once for the guy I bought from. Relatively risk free. He sells it to the dealer and then you buy it from the dealer. Take the dealer's bill of sale indicating taxes paid to the MTO. If you want to push back a bit ask to share in the savings, maybe you get a 5% discount and he gets net 8% tax savings.
 
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Pompey said:
All I think the seller wants, is to pay in taxes the difference between the purchase price of his new bike and the trade in value he gets from his old bike ie new bike 10,000, trade in 5,000 so he pays the tax on 5,000.
Click to expand...

Mina said:
You're justing going to pay the taxes on whatever they sell it to you for rather than saving a little on a private sale.
Not worth it, unless it's a steal of a deal.
Click to expand...

Yes that is what im starting to realize. I guess there is no way to renegotiate the selling price so I pay less because then he will also pay MORE on the taxes of his new purchase.

MarcosSantiago said:
Do you really think you can show up, ownership in hand, and the MTO will give you plates without charging anything (taxes)? How can that work out???

If they are asking you to go to the MTO by yourself, exactly how will you avoid paying taxes?
Click to expand...

This is also one of my worries. They said i will be paying the MTO taxes through them so when i go to MTO to get plates, i wont have to pay a penny. But I'm not sure about this, i want a guarantee.
 
gixxer_flexx said:
Yes that is what im starting to realize. I guess there is no way to renegotiate the selling price so I pay less because then he will also pay MORE on the taxes of his new purchase.



This is also one of my worries. They said i will be paying the MTO taxes through them so when i go to MTO to get plates, i wont have to pay a penny. But I'm not sure about this, i want a guarantee.
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You can't pay tax twice on one transfer. If you give the tax money to the dealership, the paperwork will say that and they will remit to the government.
 
Maybe I'm missing something, but what's stopping the dealership from deciding that the bike is all of a sudden worth $3,000 (pick a number) more than what
was talked about during the initial discussion when you show up to buy it from them?
 
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fibster said:
Maybe I'm missing something, but what's stopping the dealership from deciding that the bike is all of a sudden worth $3,000 (pick a number) more than what
was talked about during the initial discussion when you show up to but it from them?
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Walk away and don't buy it.
 
fibster said:
Maybe I'm missing something, but what's stopping the dealership from deciding that the bike is all of a sudden worth $3,000 (pick a number) more than what
was talked about during the initial discussion when you show up to but it from them?
Click to expand...

I wont buy it and the dealership will be stuck with a bike they now have to sell
 
Quick question about this, now the dealer has sold the bike in question to the OP, does it now come with the legal 30 day warrantee?
 
Pompey said:
Quick question about this, now the dealer has sold the bike in question to the OP, does it now come with the legal 30 day warrantee?
Click to expand...
If it's certified, it will come with a standard 36 day safety warranty.
 
Does insurance cover theft for the amount you write down on the MTO bill of sale? so if it does get stolen or destroyed they will only pay you out what you wrote. is this correct?
 
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