A little advice about transfer of title for old cars or project cars in Texas (Harris County) & insurance | By Ebbe Christensen
As most of you know, I bought my E-type project in the Christmas days of 2006 (wow, yes, it is that long ago and it is still not done, SCARY), and I of course had the seller sign the original 1966 title. Since I knew I would not need license plates for the car in the very near future I just kept the title and would do the transfer whenever I was ready to get the car on the road. I furthermore got some ill advice when calling the tax office back then, as they confirmed that I needed to do the transfer when I was ready to get license plates. First mistake, and it would turn out I made another big mistake, so let me share all this with the club membership.
The rules are pretty clear as far as titling a car, and I was well aware of the need to do the title transfer of a car within 20 days, I have done that many times when trading modern (drivable) cars. However, even if a car is in boxes and years from hitting the road again, the exact same rules apply. If you don't transfer within the 20 days, you are automatically fined with 10% of the tax amount. If you exceed it "significantly" - an element of interpretation – they will fine you with 10% of the tax due PER MONTH until you title the car. An example:
You buy a car project for $ 10,000 in 2006 and don't get the title transfer done immediately, sort of forget all about it, and here in May 2011 you're ready to do the transfer, here's what will happen:
|Sales tax 6.25% of $ 10,000:
||$33,00 (title application fee etc.)
|10% fine for late transfer
|Tax and fees
|Fine for excessive late transfer
52 months x $ 62.50
|Total tax, fees and fine
(vs. had you done it within 20 days $ 658.00 = difference of $ 3,312.50)
- even for an E-type, you can buy a lot of parts for $ 3,312.50…..!
In my case I was lucky that the tax office allowed me to plea my case, so I got off the hook with just paying the one time 10% late fee, and saved three grand. A friend, who bought a car project last year made me aware of all this, as in his case the tax office would not deviate from the rules and he ended up paying the late 10% fee, - times 11 months !
So, no matter the condition of the car/project or when you plan on getting the car on the road, DO the title transfer within the 20 days of purchase, - don't wait and let it be up to your negotiation skills later…! As far as insurance and license plates, you just fill out another form where you postpone those steps, and only perform the title transfer. When you're ready to get license plates on the car, you bring you title, proof of insurance and they will issue new license plates and charge you for the sticker.
The second mistake I made was to not have made a certified copy of the original title in due time. My car had the original title from 1966, the very first and only time the car had been titled, and I would have loved to keep this 1966 title, as a part of the car's documentation. However, when you transfer the title you have to turn in the old title, and there's no way you can have it back, even with a VOID stamp or similar. I pleaded for half an hour to give it back to me, but they could not do it, although they werevery understanding. They did offer me the alternative that I could have a certified copy made of the title and use that for the transfer, but it would require the signature and consent of the seller, and since I have lost contact with the seller's estate, this was not an option. So, reluctantly I had to let go of the original title, they were kind enough to make me a nice photo copy of it, but that was it.
A last and final thing, I would like to mention is insurance related to car projects. I found out through Hagerty that for a very modestamount, they will insure any non-drivable car project at whatever amount (within reason, of course) you want to insure it for. Your normal home insurance do not cover a car project, so if you have a fire, water or wind damage OR theft, you're not covered (opposite your tools and work shop stuff , which is covered under the home insurance). So, in my case I have the E-type fully insured for a sizeable amount for about a mere hundred dollars a year. Finally, last year we suffered a total loss of our workshop in the company to a fire (started next door), and that experience taught me what a difference a few pictures can make: Take pictures of your tools, your drawers, your shelves, everything. Hopefully the day will never come, but it you have to sit down and list every single item you have, from screw drivers to sockets, - after it is gone in a fire - you will loose money, trust me. Same precautions goes for all your other belongings actually. So, I am taking a lot pictures, have bought an external hard drive (much less prone to loss of data than a CD etc), stored all the pictures in two separate files, and copied all on CD's. I keep the hard drive at a friend's house, and the CD's in a third place. There are also web based off-site storage services that does the same job for a minimal fee per year.
So, maybe most members already know these things, but if not
- Do the title transfer within 20 days also on car projects
- Use a certified copy if you want to keep the originaltitle, and have one made at the time you buy the car and have contact to the seller
- Insure you car project as it is not covered under your home insurance
As for my E-type, the engine is 80% done, the body is ready for paint, so we're moving forward, - but slooowly…!
You can send material via email to email@example.com or you can call me on my cell phone 281 435 4003.
Snail mail is best sent to:
Ebbe H. Christensen
4210 Meadow Forest Lane
Kingwood, TX 77345