Tax Benefits of Registering an Exotic Car in Montana

When most people hear the word exotic, they think of beaches, the food at an upscale restaurant, or a tropical vacation. The automobile industry also uses this term to describe highly unique cars with features typical cars do not have. Below we outline two considerations exotic car enthusiasts use when determining if a car truly meets that definition.

Do You Own an Exotic Car?

Here are some of the criteria you can use to decide if your car falls into the exotic category and you need to obtain exotic car insurance:

  • Customized: You built the car by hand or paid someone to do it for you. Customized cars also include those that someone has significantly altered from the original form.
  • Exclusive and/or limited production: You have an exotic car if the manufacturer only produced an extremely limited number. Car enthusiasts also consider older, restored vehicles that have stood the test of time and are one of only a few remaining of the make and model to be an exotic car.

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Purchasing an exotic car can be a costly endeavor, but the expenses do not stop there. Insurance for exotic cars can be expensive and maintaining them can be challenging and costly as well. You also need to consider sales tax and registration fees. The good news is that many owners of exotic cars have found ways around these high fees by registering their vehicles in Montana.

Why Do So Many Exotic Cars Have Montana License Plates?

As one of the least populated states, it is hard to imagine that the bulk of exotic car owners live in Montana. The truth is that most of them live elsewhere but have registered their special vehicle in Montana to avoid the sales tax that most other states impose. Let’s say that you purchased an exotic car valued at $500,000 and your state charges 7.5 percent sales tax. Doing some quick math, registering your vehicle in Montana as opposed to your home state would save you $37,500.

You do not need to drive to Montana to register your car there. An alternative option is to work with a law firm registered in Montana and have your attorney set up a limited liability company (LLC) in your name. The attorney goes to the Montana Department of Motor Vehicles on your behalf and pays a small registration fee of a few hundred dollars. You receive your license plates and tabs in the mail a few weeks later. Montana also has no vehicle inspection or emission test requirements.

Work with InsuranceHub to Find the Best Exotic Car Insurance

Finding an insurance policy for exotic cars can sometimes be tricky when you register it in Montana. Some companies will refuse claims if you live elsewhere and get into an accident outside of Montana. You should also be aware of any laws in your state of residence prohibiting out-of-state registration as you could face fines or other legal consequences.

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InsuranceHub works with the top insurance companies in the United States that understand how registration and insurance for these specialty vehicles work. We do the work of finding the best policies for you and then present you with at least three options to compare. You may request an exotic car insurance quote at this link or by calling us directly at 770-497-1200.