‘Never Seen Anything Like This:’ Missouri Man Trades in Truck. Then the New Driver Discovers He Owes the DMV $3,300
"Your finance department should have caught it."
In a viral TikTok that generated 33,500 views as of this writing, car salesman @rideorbuy3 shares how a Missouri man trades a truck in to his dealership and then finds out the new truck buyer owes $3,300 to the DMV.
“Customer trying to avoid sales tax bites us in the A$$,” he captions.
The salesman says he bought a truck with a clean and clear South Dakota title and a history report that checked out. While the title was registered in South Dakota, the transaction was taking place in Missouri.
After the title clears, he sells the truck to a new customer. The new customer who purchased the truck takes it to the DMV to register the vehicle and finds out he owes $3,300.
“The state of Missouri sees the South Dakota title with a Missouri address and name on the title, which draws up a red flag. Missouri believes they are owed sales tax money, which they are,” the car salesman shares.
He continues, “The reason that the customer registered in South Dakota was South Dakota’s sales tax rate’s about 4% compared to where he was gonna register here in Missouri was about 9%.”
More on the DMV
He explains that Missouri would not let the new owner register the truck until the $3,300 debt was settled, so he cut the customer a check to get the truck out of limbo, since he was innocent in the matter.
Meanwhile, “The guy who sold us the truck is frustrated because he paid 4% sales tax in South Dakota. You should've never paid them anything in sales tax because you don’t live there. You can’t go to Missouri to knock off the 4% I paid to South Dakota,” the car salesman vents.
He asks viewers who should ultimately be responsible for bearing the cost—himself or the previous owner who refused his request to settle the debt?
Who Should Pay for This?
Commenters chimed in to state that he should pay for the issue because he didn’t catch it.
“Your finance department should have caught it,” one TikTok commenter shared.
“That’s on the business for not performing their due diligence,” a second added.
“Two decades as a GM, the dealership eats it. It's a house mistake for not investigating the addresses and title discrepancy pre-delivery. You can ask the prior owner to pay, but he will tell you to pound salt. Can't punish either customer,” a former GM worker replied.
While commenters agreed the dealership was responsible in this instance, the sales tax is usually paid by the customer registering the car.
As J.D. Power reports, “Even though it’s not immediately clear, sales tax applies to every car deal you make. Generally, it is paid by the buyer whenever they register the car.”
How Much Is Sales Tax on Cars?
Private Auto shares that the sales tax on cars in most states will range from 5% to 9% on motor vehicles. The percentages are determined from the purchase price of the car when it exchanges hands. Used car sales tax is the same as new car sales tax.
However, there are five states that have no car sales tax, although local sales tax can still be used. The states are Alaska, Delaware, Montana, New Hampshire, and Oregon.
Each state sets its own sales tax, so it’s best to visit your state's DMV website to find out the percentage.
Motor1 has contacted @rideorbuy3 via TikTok direct message. This story will be updated if he replies.
Update Aug. 18: The TikToker told Motor1, "The purpose of this video is to raise awareness among dealers about out-of-state titles and to caution individuals who are registering vehicles in states they don’t reside in—because state agencies are actively investigating these practices."
He said that in the case outlined in the video, his dealership paid the taxes so the customer could register the new vehicle. Despite many commenters saying he should have acted differently, he said time was ticking since the customer's temporary tag was going to expire, so he "had to act quickly to make things right."
"We've been a family-owned business for over 40 years, and we pride ourselves on doing things the right way," he said.
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