Here's How to Buy a Vehicle with a Montana LLC Included

Purchasing a Vehicle with a Montana LLC from a Private Seller

Alright, so you have decided that it is high time to ditch those crazy sales taxes in your state for your next vehicle purchase. Great! But what about when you find the deal of a lifetime, and it isn’t through a dealership? Does this change anything during the process?

Let’s take a look at how the process works if you want to buy from a private seller and use a Montana LLC as the financial instrument of ownership.

The Montana Advantage: Understanding LLC Vehicle Ownership

First and foremost, we don’t need to reinvent the wheel here. We have written a bunch of articles on using Montana LLCs for titling, registration, and ownership. Check out the entire collection to get up to speed on how the process works and why you want to use it.  

Here’s the down-and-dirty version: the State of Montana has no state sales tax, so you can title and register any vehicle there and not pay sales tax on it. It has been a popular destination for the wealthy to title and register supercars for a long time now.  

A couple of potential Dirt Legal enjoyers

And why not? If you are coming from California, the sales tax on a $500,000 car rings in somewhere in the ballpark of about fifty Gs. Yes, even if you are rich, getting billed for fifty grand still stings. 

But here’s the deal: unlike some other states where you can register your vehicle as an out-of-state non-resident (the list is dwindling), you must prove residency in Montana to title or register your car there. 

However, you don’t have to live in or own property in Montana. An LLC is sufficient to satisfy the letter of the law.

Why Choose a Montana LLC?

You don’t have to choose a Montana LLC, although if you plan on using Montana for title and registration services, you’ll have to live there unless you opt for the LLC physically. 

Legalities and Requirements: What You Need to Know Before Proceeding

You need to know and understand a few things about the Montana LLC process before you move ahead with buying a vehicle from a private seller.

First, it is owned by the LLC and not you. Of course, you will also own the LLC. This is an important distinction to understand, particularly if you ever get pulled over. Now, if you are tagging your 2018 F-250 with a Montana LLC, it’s not all that likely that Johnny Law will notice or even care unless you are breaking the law. 

But what if you want to use the Montana LLC as a conduit to title and tag your UTV/SXS? Well, they certainly might notice that and may have some very strong opinions about it, depending on where you live.  But the LLC owns the vehicle, not you. While we wholly endorse this, you may still find yourself in court arguing your position, so be prepared. 

It is not illegal to operate this way, but if we have learned anything, you may still have to prove it. Again, this is mostly happening with two scenarios:

• Supercars spotted with Montana plates

• OHVs spotted with Montana plates (or any out-of-state plates, for that matter)

Georgia went on a tirade a few years back, trying to root out supercar owners who were using the Montana LLC process. This was a Department of Revenue operation, not anything to do with the street legality of the process.

A Word About OHVs

And as for OHVs getting tagged, there are so many cases where they have had problems that you will just have to do your own research. Sometimes, the state in question allows it, but local municipalities balk. Sometimes, it’s entire states (Pennsylvania is fairly notorious). If you’re planning to register your OHV in Montana, we assembled a 50-state guide that breaks down which states are for and against this practice. Check it out here.

Due Diligence: Researching the Vehicle and the Seller

This is more of a general statement than anything. You need to ensure that the person you are buying from checks out (as much as you can), and mostly, to ensure that the vehicle checks out. 

We suggest a VIN check for this stage of the process. It is the cheapest insurance out there to protect yourself against vehicles with title issues. These sorts of things can be a real headache down the road, long after you have bought the vehicle. See, sometimes the DMV doesn’t even catch it when you do the initial registration; I bought a van back in February of this year, and around August got a letter in the mail stating that they didn’t have the right copy of the lien release from the seller’s bank. My van spent about 6 months with its title in limbo as a result.

Not that the VIN check catches everything would have caught, but it is a lesson in how you can still have problems down the line even after the DMV processes your title and registration.

In case you aren’t convinced already, make sure to check out my case study article on how a VIN check saved me from getting myself into a lemon. 

Pros and Cons: Weighing the Decision to Buy with a Montana LLC

The decision of whether or not to buy with a Montana LLC is up to you. Whether you are buying from a private party or a dealership doesn’t make much difference, to be honest. 

The biggest thing to keep in mind is how you intend to purchase the vehicle. Vehicles in the LLC must be owned outright, so they have to be purchased in cash if you are still in the market to buy, or you can go through a service like LightStream. 

LightStream is a lender that allows you to hold the title, so when you do the DMV paperwork, you are still considered the owner of the vehicle with no liens involved. We can’t recommend their services enough, so check them out here. Please note that as a LightStream affiliate, we may be compensated if you use their services through the links on this page.

Already Have an LLC?

Another thing to consider is if you are purchasing a vehicle and you already have an LLC. It could be from a business venture, or it could be another vehicle purchase. No problem. 

When you go through our Montana LLC vehicle registration service, there is a series of prompts. Just go through them, and when it asks if you already have a Montana LLC, follow the prompts, and we will take care of the rest.  

Of course, if you don’t already have an LLC, that is no problem. In fact, it is one of our specialties! We will set up your LLC, and you can use the same LLC for all subsequent Montana registrations. 

Don’t Have The Car Yet?

Either way, you do not need to purchase the vehicle before setting up the LLC. We can set up your LLC for you days, weeks, or even years ahead of you buying the vehicle in question, so there’s no pressure to do it all at once.

Advantages of LLC Ownership in Vehicle Transactions

The main advantage of LLC ownership in vehicle transactions is the DMV, where you can register the vehicle in Montana and pay no sales tax. That is pretty inviting, considering some states are in the ballpark of ten percent. Think about it in these terms: a $75,000 pickup can tally up to $7,500 in sales tax alone. Ouch.

Crazy that these are in the $75k ballpark new, but here we are. Save that sales tax and invest it elsewhere!

There is also the separation of assets advantage, where the LLC has legal liability instead of you personally. Additionally, Montana registers many vehicles with permanent plates, and there is also no smog test or physical inspection to pass… the benefits go on and on. This isn’t totally necessary or anything, but it could come in handy. 

Potential Challenges and How to Mitigate Them

So, what are the pitfalls of this deal? There are sure to be some, right?

Probably the biggest hassle we see is maintaining an LLC annually. But this really isn’t a big deal; we make it easy for you and will handle the paperwork, so you don’t need to worry about it. 

I already talked about this earlier, but it bears repeating: be careful about flashing that Montana plate around. Your local authorities There is nothing unlawful about this program, but that does not mean that your local authorities won’t try anyway. They have nothing to lose by pulling you over and making you go to court to fight your position. 

We aren’t suggesting you run away from a fight, but just beware that while most LEOs don’t care what plate is on there, some will flex on you as long as it is current. And the thing about the Montana LLC program is that almost everyone has some level of awareness about it by now. 

Again, nobody is thinking twice about that plate if you are rolling around in a 2019 Ram 2500. But a high-end supercar? Especially in California? They know. 

Spotted in the wild. They know.

And again, if you are buying a UTV to make street legal through a Montana LLC, be warned that some states will pull you over and impound the vehicle if you don’t put in on a trailer. Colorado is one state we have been getting reports of this behavior from. 

The best resource for this is our comprehensive 50 State UTV Guide. We reviewed all 50 states to find their written and unwritten stances on street-legal UTVs. 

After the Purchase: Maintaining Compliance and Enjoying the Ride

Okay, so you have an LLC and bought a vehicle from a private party. Awesome! 

Now you have a few options. First, if for some reason you want to, you can always transfer the title and registration to your home state. There aren’t too many compelling reasons why you would want to do this, but some people do. 

Honestly, a lot of it probably has to do with maintaining an LLC. Here’s the really wild part: you can have a vehicle with permanent registration in Montana if it’s over 11 years old, but if you have it registered through an LLC, you still have to keep the LLC up to date every year. 

Beyond that, there isn’t anything different about registering a vehicle through a Montana LLC than any other method. And when you go through Dirt Legal, we can handle all the recurring maintenance on your behalf.

Dirt Legal is with you every step of the way throughout the entire process. We will help you set up an LLC and then handle the entire registration process from there. All you need to do is fill out and return the paperwork and wait for your new title and tags. 

And always, ALWAYS buy a VIN check for any vehicle you are interested in buying. There is no downside; it is the most accurate way to determine the real title history of the vehicle. You just never know what has transpired over the course of a vehicle's life.