Why You should Register Your Car In a Montana LLC
As if the skyrocketing housing market wasn’t enough to cause economic whirlwinds, the car market has become the newest victim of unpredictable trends and fluctuating costs.
Thanks to global supply chain crises, resource shortages, and other logistics disruptions, rising car prices are leading to a slowdown in sales for both new and used vehicles. Older models are limited as it is, and waiting lists are becoming outlandishly long for newer models.
Between May 2021 and May 2022, the average price of a new car increased by 12.6%. For used cars, prices rose by 16.9%. In the same span, a typical 10-year-old vehicle began with a median cost of $7,997. Today, that number has catapulted to more than $16,000.
While many experts would like to claim there is a near end in sight, everyone — from car dealers to customers — is receiving mixed signals. Some analysts say the global microchip shortage will continue to plague automakers until the beginning of 2024. Others say the used car market will crash within the next year. Regardless, many people conclude that now is the time to avoid buying a car at all costs.
However, what they don’t know is that hundreds of car owners have recently discovered a genius method that allows them to affordably purchase, register, and operate their vehicles. Through this method, anyone can own and operate a new vehicle without hefty costs of sales tax, annual maintenance fees, and licensing fees.
The only requirement? You must register your car under a Montana LLC.
The Deal With Out-of-State Plates
We’re sure you have a lot of questions, so let’s start at the beginning.
Most of us have seen our fair share of luxury vehicles — stylish supercars decked out with all sorts of bells and whistles that make anyone stop and do a double take. However, what many fail to notice is the license plates attached to their bumpers. Or, more specifically, the fact that most of them are from an obscure state like Montana.
Is it because they’re engaging in shady business? Perhaps there’s a trend amongst exotic car owners to buy out-of-state plates? Or is there a more legitimate reason why?
What Makes Montana So Special?
The average sales tax rate for cars varies from state to state, but according to the World Population Review, the national median is around 6%. Since the average vehicle price is around $43,000, that means most Americans are paying an additional $2,500 in sales tax for their car.
When it comes to luxury vehicles, it’s a whole different ballgame. Price tags can range anywhere from half a million dollars to hundreds of millions, depending on the make and model. So, sales tax fees could cost upwards of $100,000.
With already skyrocketing car prices and hefty sales tax fees like these, it only makes sense that car owners would be searching for a way out. Enter, Montana. Most people look at Montana and think of its natural beauty and breathtaking landscapes. But for car owners, their mind immediately goes to the state’s zero-sales tax standard.
As such a sparsely populated state, Montana does not impose a sales tax on its residents. Instead, the state receives its necessary funding from income and property tax, making it a tax haven for out-of-state car owners.
Especially for people who come from states with considerably high sales tax (like California, Indiana, Rhode Island, Colorado, and New York), the idea of registering a newly purchased car in a sales-tax-free state like Montana becomes that much more appealing.
Additional Perks of a Montana Car Registration
As if no sales tax wasn’t didn’t do enough convincing, there are a few other advantages worth knowing to obtain a Montana license plate. When budgeting for a new vehicle, most people split the cost into two groups: the initial purchase of the car, and the costs that come with operating the car.
From inspection fees, licensing and registration costs, and other annual maintenance requirements, the average cost to maintain a new car can be up to $1,200 each year. For luxury cars, that cost can reach over $10,000. However, in addition to no sales tax, Montana doesn’t require annual inspections and charges low licensing fees.
As the Clean Air Act states, Montana does not have smog or emissions test requirements for the same reason it doesn’t require sales tax: there simply aren’t enough populated areas that meet the federal government’s air quality regulation standards to do so.
In line with no annual smog test requirements, Montana also doesn’t demand annual vehicle inspections. In most states, the average car inspection can cost anywhere between $150 to $300. With luxury cars, that rate could be several hundred dollars more. Though this might only save you a couple hundred per year, those savings can quickly add up over time.
Additionally, Montana offers low licensing and registration fees. The amount in which you pay to register your car will depend on its age. For cars over 11 years old, owners are only required to pay a single flat fee for registration. Newer models can range anywhere from $80 to $200.
Obtaining a Montana Car Registration: The Don’ts
Earlier, we mentioned the key to properly obtaining a Montana car registration is through a Montana LLC. However, many mistakenly jump into the process without understanding how to do so. Or, more accurately, what not to do.
An LLC, or limited liability company, is an organizational structure that works to protect its owners and members from responsibility for its debts or liabilities. While LLC regulations vary between states, most states don’t impose any restrictions on ownership, meaning virtually anyone, anywhere can set up an LLC.
Now, we come to the Montana LLC strategy. By establishing an LLC remotely in Montana and purchasing your car under the aforesaid LLC, car owners can receive all the perks that would come with living in the state, including no sales tax, no annual inspections, no smog test requirements, and low licensing and registration fees.
However, opening an LLC isn’t a one-and-done process. There is an extensive procedure involving paperwork submissions, documentation, and payment requirements. Then, you must ensure that your LLC is compliant after it’s formed.
Likewise, the process of assigning your newly purchased car to your Montana LLC is just as elaborate. Federal law prohibits the falsification of personal information at DMV, such as your residential address. Not only is it forbidden by law, but it’s a punishable offense that can result in fines of up to thousands of dollars, or even jail time.
So, before taking any further steps, it’s worth consulting with a third-party professional
Trust us: It always helps to have the advice and support of an expert.
How to Legally Obtain a Montana Car Registration
Now that the scary stuff is out of the way, we can cover how to register your car in Montana legally and accurately. Again, setting up an LLC will differ by state, but there are some general guidelines of what you can expect throughout the process.
The first step is selecting a name. This might not be the most important, since you’re simply opening the LLC to purchase and register your vehicle. Nonetheless, it might take some time to decide on a business name.
Next, you’ll need to designate a registered agent, which in this case, would be yourself. The only requirement to become an agent is you must be over 18 years old, and you must be available at an address within your state during standard business schedules.
To officially establish your LLC as a legal organization, you’ll need to obtain a copy of your state’s LLC Article of Organization Form. Simply put, signing this document permits a state agency to handle your business filings. The basic information you can expect to provide will include your business name, your address, contact information, and the purpose of the business.
Once these steps are completed, all that’s left is to purchase and register your car under your Montana LLC.
Register Your Car In a Montana LLC Today
As unpredictability ensues in the current car market, many vehicle owners are unsure whether now is a good time to purchase a new one. Fluctuating fuel prices, rising used car costs, and extending waiting lists for newer cars don’t exactly make the idea seem appealing.
Fortunately, with a Montana LLC, the process becomes much easier, simpler, and overall more affordable. Once you’ve opened your LLC, all the burdensome fees of sales tax, inspection costs, emissions testing, and licensing and registration can be wiped away.
Of course, as with any big purchase, there is a significant amount of time and consideration involved. Understanding how to legally set up an LLC and register your vehicle under it can seem complicated. With a third-party expert, a qualified agent can take care of that for you.
From the initial documentation filing to receiving your Montana license plate in the mail, 5 Star Registration covers all the necessary steps while keeping your personal information private and protected.
- Image Credit:
- Featured Image, Pexels
Calculate your savings
State Sales Tax Rate:
Your Current Registration Cost:
5 Star Registration Cost: