Calling Canadian Oppos with cheap cars (alternately Oppos with access to the Canadian Red Book)

"Smallbear wants a modern Syclone, local Maple Leafs spammer" (smallbear94) 06/19/2015 at 12:30 • Filed to: None

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I was thinking of a way to make a little extra cash. I reckon I could pick up a car for scrap value, say a common one like a Caravan or Corolla, strip out the good parts and scrap the rest, and make a couple hundred dollars profit selling the parts. Scrap (not a wrecker yard) would cover most of the cost.

The problem I’m running into is the tax. It’s based on purchase price or Red Book value, whatever’s higher. If it happens I buy a car for scrap value (3-500$) and it turns out that the Red Book says it’s worth 2000, I’ve erased most of the profit and wasted a lot of time.

So, I’m looking for red book values for cheap cars. Any cheap cars. You never no what’ll turn up. Also meaningful advice on why this is stupid/smart and better ways to handle it.

thanks

Svend > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 10:03

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So your tax system is similar to the U.S. then I guess.

As a Brit I find this completely alien to buy a car privately then pay a tax to the government on it. Here we buy the car, get the V5 document, they sign their bit to say they’ve sold it-we fill out the rest to say we bought it, get the car home and either SORN (declare the car off the road) and part it our or fix it.

Dasupersprint - base trim is enough > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 10:44

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It frustrates me so much when I realize that a car can generate so much tax money if it’s sold many times in it’s life

Smallbear wants a modern Syclone, local Maple Leafs spammer > Dasupersprint - base trim is enough 06/19/2015 at 10:47

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They’ve got to get the money somehow, otherwise our basic services will go to shit... wait.

DrScientist > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 10:59

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here in the states, youre paying sales tax. which is a tax on any exchange of money for goods (or services too i think). sales tax is a state tax, not a federal tax, and it is collected when the car is registered for road use.

if the car is never registered for road use. then it is the purchaser’s responsibility to declare the purchase on their state tax returns and pay any outstanding taxes. in this case you declare the value of the car/scrap and if you have a receipt, youre good to go.

at least, this is how ive done it.

Kofi > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 11:41

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If you have a friend who has dealer plates (yellow in Ontario) you can use those without registering it then part it out. Or just put some old plates on drive home then part it out, if you’re not going to insure/drive it why register it?I remember my dad doing this back around 2000-2005.

Smallbear wants a modern Syclone, local Maple Leafs spammer > Kofi 06/19/2015 at 11:52

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I don’t have any dealer friends and I would tow it home.

The problem is the scrap yard will only take it if it’s registered in my name (afaik, all info I’ve found so far points this way). I’d register it as unfit to drive so I wouldn’t need an insurance policy #, but I’d still have to pay the tax.

Luc - The Acadian Oppo > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 12:29

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Simple. Move to Alberta! Here we have no sales tax on used cars unless it is bought from a dealer. If you buy any car thru private sale no matter if it’s worth 5 bucks or 5 million bucks there is no tax AT ALL.

It’s like heaven for a guy like me that likes buying old cars for cheap $1000-$1500 fixing them up and then selling them for little to no profit. As long as I don’t lose money I’m fine with it since it gives me something to play with. Once I get bored of it get rid of it and get something else.

Smallbear wants a modern Syclone, local Maple Leafs spammer > Luc - The Acadian Oppo 06/19/2015 at 12:30

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Unfortunately not an option.

Smallbear wants a modern Syclone, local Maple Leafs spammer > DrScientist 06/19/2015 at 12:35

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This is Ontario. Tax is on the value of the car, either Red Book or purchase, whatever’s higher. The tax is applied (afaik) regardless of whether it’s registered for the road or as unfit. I’d have to register as unfit, as I don’t intend to get insurance and the scrap yards want to see it registered in the name of the person scrapping it.

SidewaysOnDirt still misses Bowie > Svend 06/19/2015 at 12:36

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The US doesn’t really have a tax system for cars. That’s done at the state level. Some set their pwn prices, some are based off of the sale value (hence every private-sale car in Florida seemingly selling for $500), and some have a flat registration fee.

Svend > SidewaysOnDirt still misses Bowie 06/19/2015 at 12:38

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Still. It seems wrong. The tax has already been paid on the car who should you have to pay tax on the subsequent purchase of the vehicle to the national, regional or local government.

SidewaysOnDirt still misses Bowie > Svend 06/19/2015 at 12:42

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You don’t expect to go to a second-hand shop and not pay the VAT there, do you? The same thing applies to second-hand cars and the sales tax.

Svend > SidewaysOnDirt still misses Bowie 06/19/2015 at 12:45

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Not in the U.K. thankfully. A shop of any kind is a registered taxable business and tax is factored into the purchase price. A private sale isn’t.

TheVancen- In Pursuit of a Greater Payday and Car Parts > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 12:49

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Would you make more money if you bought a junker, say a car with some cosmetic damage, or a few worn parts, on the cheap and fixed it up, then sold it as a complete car? Me and my father have done this in the past, but we spent a lot more time on the cars.

I am located in Ontario.

cletus44 aka Clayton Seams > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 12:55

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Cheap car buying Ontarian here. The key is to buy pre-1987 vehicles. These don’t have a book value and can be ‘appraised’ for whatever value you like if you know the right people. My 1969 Chrysler didn’t have a ‘book value’ so they went with my appraised value.

Smallbear wants a modern Syclone, local Maple Leafs spammer > TheVancen- In Pursuit of a Greater Payday and Car Parts 06/19/2015 at 12:56

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Possibly. I should look up a few examples. The snag I see with that is you’ve got to be 100% sure what you’re doing before you start, and I don’t know how much profit would be made on a 300,000km+ vehicle. I was thinking parts because then I don’t have to store a car. I could go see it and buy it on thursday, register and pick it up friday, pull parts friday evening and saturday and scrap what’s left the same day.

In any case thanks for the idea, I’ll look into it.

Smallbear wants a modern Syclone, local Maple Leafs spammer > cletus44 aka Clayton Seams 06/19/2015 at 13:04

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Thanks for the tip. Now the trick will be finding pre-1987 vehicles that are common enough to still have a parts market :)

As far as appraisals—who should I go to in the GTA?

cletus44 aka Clayton Seams > Smallbear wants a modern Syclone, local Maple Leafs spammer 06/19/2015 at 13:25

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No problem. Double check that 1987 is the exact year btw. I think it’s correct but I’d hate to be wrong and have you end up paying tax. I know my 60’s cars are easily old enough.

For appraisers, I’ve had the best luck by going onto Kijiji and finding people there. Look for guys that aren’t affiliated with a shop, these guys are usually really chill and as a bonus, not always knowledgeable about older cars. Remember to make your car look extra crappy when the appraiser comes!

Smallbear wants a modern Syclone, local Maple Leafs spammer > cletus44 aka Clayton Seams 06/19/2015 at 13:28

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Thanks.

SidewaysOnDirt still misses Bowie > Svend 06/19/2015 at 13:37

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So what about registration? Isn’t that a bit like a tax?

Svend > SidewaysOnDirt still misses Bowie 06/19/2015 at 14:00

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Registration is what you pay on the initial/first registration of the vehicle of £55 (this is a one off fee unless you wish to transfer a different plate to the vehicle, this is merely called a transfer fee or you are re-registering the vehicle into your name from a previous owner and no V5C is available so a V62 application needs to be filed this is where a fee would be levied) as the licence plate (unless changed for a private plate) remains with the vehicle through its life.

The only tax you pay on a vehicle is the Vehicle Excise Duty based on the type of vehicle and its CO2 emissions (but if you intend to take the vehicle off the road for any length of time then you declare it SORN) otherwise you will incur a fine as they’ll suspect you are driving you vehicle without VED (road tax).

thebigbossyboss > Dasupersprint - base trim is enough 06/29/2015 at 11:30

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Especially when THE WHOLE ENTIRE PURPOSE OF THE GST was to prevent this from happening.