Out Of State Registration / Insurance Coverage?

[TWN495]

Happy Saturday, folks; I'm hoping I'm not the only Californian that has worked through this problem.

There is a loophole that I've stumbled upon that I'm trying to take advantage of.

The plan is to establish an LLC out of Montana, into which I would transfer my truck's title, allowing me to register the truck there instead of in CA.

This has many benefits, but the one that matters the most to me is that I will no longer have to smog-check my truck.

The issue is that the truck would be registered in MT but garaged in CA.

This caused my insurance agent's head to explode because a vehicle was supposed to be insured in its registered state.

However, I don't live in MT, so I can't have a policy there.

Otherwise, people all over would shop for the cheapest insurance policy available regardless of their state.

I suspect they assume a vehicle is always registered where it is garaged and must be essentially the same, but there are companies all over that have a fleet of vehicles driven primarily in locations other than the company's base of operations.

I'm hoping someone out there has dealt with this problem.

The agency that provides this LLC/titling service says they are not qualified to make these recommendations.

Another agency says that I only need to add the LLC as an interested party to my existing policy, but my insurance provider didn't like that idea.

Thanks in advance for the help!

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[badbajawa]

You don't live in Montana.

Your business does.

Your business insures the vehicle for all that may drive it.

If you get pulled over, you never drive the vehicle for personal reasons.

I don't care if you're towing a boat to the lake; you must say you are taking it there for advertising, etc.

It's nearly impossible to properly insure a business vehicle for personal use as your business claims that expense, and you don't want the IRS looking at you too closely.

This is way more of an in-theory problem, but if you need to utilize that insurance for some reason, they will be looking for any reason to deny you, and personal use is a reasonably common sticking point.

There are ways, but it is fairly tricky to work around, and you must be conscious of the consequences if you ever deviate from the story you have to work back to.

You may need to register that business in both states to insure the place of storage properly.

Going that route will get you insured, but the likelihood that your insurance will adequately cover you in the event of an incident is greatly diminished.

Not legal advice. I am not a lawyer.

Hopefully, someone else has more experience with your situation and can better assist.

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[badbajawa]

I have seen transfers into trusts located out of state work better at times.

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[TWN495]

The trust idea may be an option.

The way I understand the LLC that I'm describing is that it isn't a business but an asset-holding company.

Maybe that's enough of a difference that it wouldn't carry all the complexities of a business-owned vehicle that can only be used for business purposes.

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[toyota_mdt_tech]

My dad snowbirded to palm springs in the winter.

He had a car he left there, was registered in his home state (WA), and would do it that way.

The car was there year-round, but he lived there less than half the year.

Otherwise, he would have had to do Cally smog and transfer it back.

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