Source
r/legaladvice•
bdude

[AL] How would you go about legally giving vehicles away?

Business Law

I have a friend that wants to give cars to families that are in tough situations. He's done well for himself and he's come a long way in life, and now he wishes to help where he can. He doesn't want to make any profit off of this business and will be buying the cars for cash and performing required maintenance himself. He attempted to go the route of creating a non-profit, but they required him to have a dealers license and a car lot to hold the vehicles.

He doesn't own any land that could become a car lot, and his intentions are to give away only six vehicles a year. I was hoping that someone may have a more suitable way for him to distribute the vehicles without having to start a full fledged car dealership. Any ideas are appreciated and I'll look into them all, feel free to drop suggestions below, they're all appreciated.

Posted Jan 11, 2018, 8:35 PM UTC

412
sodakdave•

If your friend has done well enough for himself that he can afford to give away multiple vehicles a year, he absolutely can afford a couple hours with a local attorney to make sure he gets set up with everything he needs to do this correctly, and not run afoul of any specific local, county, city, etc ordinances someone online may not be aware of.

7
bdudeOP•

Don't worry friend, I'm just looking for ideas to shoot at him - this will all ultimately be set up through an attorney, I just want to make sure he doesn't make a choice without knowing all his options first.

1
sodakdave•

Another idea would be to coordinate with a local car lot that can buy the vehicles and transfer them on his behalf. They would have the license, take care of all the paperwork, and he would probably pay them a token sum for being the middle man. They get the sale numbers, and he doesn't have to worry about that side. Then all he has to worry about is the legal and tax implications of a cash gift to the needy persons in question.

2
sodakdave•

He MIGHT be able to get around the dealer license if he sets up a charitable organization and pays gift tax on the vehicles, but that's going to come with it's own set of specific restrictions.

1
mathergj•

Step 1 - identify needy family

Step 2 - buy car

Step 3 - sign over title to car for a dollar

Step 4 - call a good local mechanics shop, setup account with them for maintenance of the cars, tell family where shop is

Step 5 - sit back and feel good about being a bro

Apparently some states think that giving shit away should be regulated.

2
sodakdave•

I'd be careful giving advice like that. In Alabama, you're only allowed to transfer 5 vehicles a year without a license.

3
mathergj•

Your kidding? I can't essentially give shit away for free? Good lord I hate people.

1†
sodakdave•

You can give it away for free as long as you also pay the gift tax on it, which is probably best done under a non-profit or charitable organization.

One way or another the state is going to get their pound of flesh.

4
mathergj•

Good point on the gift tax, hadn't even thought about that. The value of the cars is going to put this into gift tax territory each time... Sigh, oh well, u/bdude you friend needs to talk to a local attorney.

This is why we can't have nice things.

1
djwhiplash2001•

http://codes.findlaw.com/al/title-40-revenue-and-taxation/al-code-sect-40-12-390.html

He might want to limit the number - it look like you're allowed to sell 5 cars a year without obtaining a dealership license, but any more than that, and he will need one. There might be other qualifiers that could require him to have a dealership license, so I would definitely advise an hour or two with an attorney.

1