How To Sell A Vehicle With A Montana LLC

How Do You Sell a Vehicle That's In a Montana LLC?

An interesting topic recently came up in the Dirt Legal hive mind: What happens when you decide to sell the vehicle that you registered through a Montana LLC? Because this happens. 

I mean, the average vehicle ownership in the U.S. is just now hitting about six years for new vehicles and only a little over four years for used cars or vehicles. The odds are that you will end up selling it eventually, and when you do, how exactly will that process go? Let’s take a look at this process and find out.  

A Brief Overview of Selling a Vehicle With a Montana LLC

Alright, so first and foremost, let’s talk about how a Montana LLC works in terms of the legal framework. 

LLCs in Montana can be sold or transferred fairly easily. After all, it is a legal framework for a company, and companies are bought and sold all the time; the past couple of years have seen roughly nine thousand business ownerships transferred per year. 

But this is admittedly a little bit different. The odds are good that you are using your Montana LLC for the expressed purpose of titling and registering your vehicle(s). And that’s awesome! That is one of our best programs, and we are very proud of it. We have helped over 20,000 people make their dreams come true and get their respective whips on the road, with a lot of them going through our Montana LLC programs. 

So, how will it work if you aren’t using it for a business? Well, first off, you don’t have to sell the LLC with the car. You can still sell the car on its own. Since you own the LLC, you can sign the title instead of the LLC because you are basically the LLC. You own it; you own any assets in it. 

However, if a potential purchaser has an interest in the Montana LLC concept (many supercar and high-end motorhome owners are well aware of the perks), they may wish to title and register the vehicle you are selling in an LLC, since they themselves might want to do an LLC.

If you only have that asset in the LLC and you aren’t planning on using it again, transferring the LLC along with the sale of the vehicle is probably a good option. I mean, why would you want to pay the annual fee to keep it open (it isn’t free)? If you plan on purchasing a replacement for the vehicle you’re selling, then keeping the LLC open makes sense, and you shouldn’t sell it because you’ll have to start over again with a new one. But otherwise, it can be a good selling point to transfer the Montana LLC with the vehicle.  

As it turns out, that is one of many reasons why keeping the vehicle within the LLC and selling the LLC is actually easier for everyone involved.

How Is Selling A Car Owned In An LLC Different Than Selling One Under Personal Ownership?

Look, LLCs aren’t some sort of legal device that radically alters the titling and registering of vehicles. It really isn’t. At the end of the day, it is really not a big deal, nor is it any different than selling anything else. 

Advantages of Selling a Vehicle with a Montana LLC

The biggest advantage to selling the vehicle in a Montana LLC is to the buyer. Well, sort of. 

A lot of states do not have exit taxes or sales tax on vehicles being sold, but some certainly do. They will sap every dime out of you, given the chance. So, if you live in a state that charges sales tax on vehicles being sold, you need to consider a Montana LLC when you purchase any new vehicle. 

That way, when it comes time to sell it, you can walk away without getting screwed on the exit, PLUS the new owner gets the benefit of being tax-free on the purchase. And the biggest perk is they don't have to tile and register it again because it's already titled and registered to the LLC they just bought!

Are There Any Real Benefits to Selling A Car With A Montana LLC?

The biggest benefit of selling a car that was titled with a Montana LLC is that it can be sold with the Montana LLC, although it doesn’t have to be. The thing is that the Montana LLC is required for you to register and title your car in Montana if you don’t reside there full-time. But you can sell it to anyone you want, and they can do with it whatever they please. Now, if they plan to register it in Montana and don’t maintain a domicile in Montana, they may want you to transfer your LLC to them. Of course, this is entirely up to you.

Perhaps the biggest perk is that if you sell them the LLC, you are selling them a turnkey operation with the car already successfully titled and registered in Montana. That means they do not have to go through all the setup, which saves them time and money, and that's value you can build into your sale.

Note: If you plan on using your LLC again for another vehicle purchase, you won’t want to do this because if you do, you’ll have to start the LLC process all over again.    

Liability Protection

One thing you need to understand about the Montana LLC process is that we are going to be linking to a bunch of sources that are generally legal publications because an LLC is a business. You need to understand that you are dealing with legal terms here. Also, we are not lawyers; we are enthusiasts who help you legally get your vehicles on the road. If you have legal concerns about transferring the ownership of the LLC, such as the tax implications, talk with an attorney.

The primary motivation behind LLC formation is to shield yourself from personal debt associated with a firm one owns or participates in. By creating an LLC, owners and management are shielded from liability for corporate debts and obligations; only the LLC is accountable. However, an LLC's restricted liability isn't always ideal and can vary depending on the state in which it is formed.

Now, this may not really mean a whole lot in our application because you need to own the vehicle outright to get it titled through our Montana LLC programs. There won’t be any debts associated with the vehicles, so, frankly, there isn’t a whole lot of liability protection when you use a Montana LLC for vehicle titling and registration. But again, talk with the lawyer if that's your concern.

Tax Benefits

Of course, it usually comes back to this. And why shouldn’t it? How about we take a look at the r/LosAngeles subreddit and see what in the world is going on (hint: it’s not just a California problem):

And here’s another one, this time from Virginia (I’ve talked about this before!):

Maybe just one more: This thread goes on for over 200 comments with more of the same. 

And I just sit here thinking about what a windfall a Montana LLC title and registration would be for them. $900 per year in Virginia. $750 a year in Cali. Three grand a pop to bring your cars into Georgia. The list goes on and on. 

What’s the common ground? They could have all saved a bunch of money if they had registered in Montana. 

Think about the couple that moved to Georgia from LA to save money (plot twist: they ended up moving back to LA🤯). They could have been saving all kinds of money before they left, never transferred plates, never paid three Gs to transfer to Georgia, never paid to transfer back to California.  

Steps to Sell a Vehicle with a Montana LLC

There are a few steps you need to understand to sell a vehicle with an LLC. First, you need to ensure you are approved to sign the title. Remember, it is owned now by the company, not you, the person, any longer. 

You will need to seek a notary for the process, but it is pretty straightforward from there. You sign the title with a notary, produce a bill of sale, and that’s about it. No need for a lien release because you cannot have a lien on a vehicle owned by an LLC

Transferring ownership to the Montana LLC

For one thing, you can absolutely transfer ownership of an LLC. An LLC is a business instrument, and businesses get bought and sold constantly. The thing that you need to realize is that your LLC is still a viable business tool, even if you aren’t really using it for a business (by the way, it doesn’t matter whether or not you ever use it for a business; the state will gladly pocket your money for LLC formation no matter what you do with it). 

Legal Considerations

For the sake of our discussion here, the legal considerations are on the end of the owner. Using a Montana LLC is perfectly legal to register your car, whether you are a permanent resident of Montana or not. With that said, we cannot guarantee that you won’t get pushback from the local authorities if you get pulled over. 

Not that you will have a target on your car or anything, although some states are certainly aware of this going on and are not fans. Sadly, a lot of this stems from “Instagram bros” flaunting wealth in supercars, and those cars are clearly wearing Montana tags while they are flying around Atlanta. Not all that smooth, Lambros. 

In our experience, the only people who routinely had run-ins with the law are SXS/UTV owners who have gone through our Montana LLC street-legal program. This wasn’t because the registration and titles were unlawful; it is nearly always because of local rules regarding an OHV on public roadways. The owners then must either eat the ticket and cease riding or go to court and defend their positions (which many do). A lot of the cases get thrown out, but not all. 

But if you aren’t in either of these camps, it is highly unlikely that anyone will ever notice or care about the Montana plate on your five-year-old minivan. 

Required Documentation

So, what is the required documentation to sell a vehicle with a Montana LLC? It’s really not complicated. A Montana-titled vehicle isn’t any more difficult to sell than one of any other state (it’s a lot easier than California, where you MUST provide a passing smog check to sell it). 

The biggest thing about selling a vehicle with a Montana title is that it must be notarized. There are still a handful of holdout states that still require this, and Montana is one of them. 

Beyond that, there isn’t really anything special about the sales process. Remember, the LLC that owns it is a completely separate thing from the vehicle itself. You do not need to sell the LLC with the vehicle, although if you want to, you certainly can. Transferring LLCs is no big deal, and it might be a selling point for the vehicle. 

Compliance with Montana Tax Laws

Thankfully for you, there are no taxes associated with selling a vehicle in Montana. There are more than you’d think, and a Montana LLC title ownership is the best way to avoid those because no matter where you live, the Montana title means you don’t pay any sales tax on it. 

If you are curious about what your state’s sales tax is, take a look at https://www.salestaxhandbook.com/. This is a great resource, but make sure that you check to make sure that the links are current. It is not an official website, so there is the possibility that links are outdated. 

Tips for a Successful Sale with a Montana LLC

Alright, so what do you need to know to sell your car?

First off, make sure that your paperwork is in order. You need to make sure that you have the title in hand. I speak from experience when I say there is nothing worse than getting into a purchase and realizing that the seller doesn’t have a title. 

Properly Maintaining Records

The title is really the only thing that you need to worry about (unless you intend to transfer the LLC as well). Since you can’t own a vehicle in a Montana LLC without owning it outright (no liens allowed), you will have the title on hand. If you have lost it over time, you must request a copy before listing the vehicle for sale. 

If you have the title in hand, it’s game on. 

Potential Challenges and Solutions When You’re Selling With a Montana LLC

The reason why our Montana LLC title program is so popular is because it really is simple. Not only is it simple, but it is also a secure way of ensuring things are easy if you ever move. Taking your vehicles from one state and titling them in another state is a huge pain, and as we saw earlier, it can be very expensive. 

So, are there challenges when you’re selling with an LLC?

Not really. 

You are the LLC owner, which makes you the owner of the company and also the owner of the asset. There isn’t some sort of 3rd-party overlord calling the shots with this program. You decide what happens to the vehicle and the LLC.

Now, I do want to take a moment to clarify something. 

The title is forever, and once you own the vehicle with a Montana title, you do not need a Montana LLC if you weren’t ever going to register it. The LLC is only there for registration purposes. 

The LLC is only there to register the vehicle. The title does not care. You can hold a title, and then you can lapse the LLC if you really want. Of course, this is not recommended, but I add it here because we often get used to the concept of the title and registration being synonymous when they absolutely are not. 

If your LLC lapses, you do not cease to own the vehicle. However, you will lose the ability to register it in Montana unless you physically move there and have your own Montana address. If you decide to register it, you’ll either need to restart your Montana LLC or transfer your title to your home state. 

Final Thoughts on Selling a Vehicle in a Montana LLC

Eventually, you will probably want to sell or upgrade your vehicles. You will probably want to sell it outright, and if it is owned through our Montana LLC program, you might be a little intimidated. But don’t sweat it.

The process of selling it isn’t really any different than selling any other vehicle from another state. Since there are no inspection requirements in Montana, you don’t need to worry about whether or not you have a passing inspection or smog check actually to sell your car.  

You mainly need to think about whether or not you will need the LLC again down the road for another purchase, or if you already have other assets in it, or if you want to transfer it to the buyer of your vehicle along with the title (again, two completely separate things). 

Whatever it is that you want or need to do, feel free to contact our team. We have done this all many times before (over 20,000 times, to be specific), and will help you figure out your next steps.