California parent trying to decide whether to purchase/register car in California vs. Arizona?

Question

I live in California and my child goes to college in Arizona.

I am trying to decide if I should buy / register the car in California (and have her under my policy - lower policy cost) OR buy/ register the car in Arizona (under her own name - to minimize my liability. We've been checking Craigslist and within our price range, the cars in California have much higher mileage and more expensive than cars in Arizona. What are the pros and cons of both options?

Answer 1

Question.. Where will the car be actually residing? Where will it be parked everyday/night? How many days a year? I ask only because I believe it's a law in ANY state that if the vehicle is primarily driven and parked in oh let's say AZ, it must be registered and insured in AZ. Not trying to be sarcastic, But it bothers me that you are even contemplating your options, which I think you only have one. Do the right, legal thing. Which is, if you buy a car for your daughter to drive in AZ. Buy HER a car. Regardless of where you purchase the vehicle, do research on that vehicle.Let her register and insure it in her own name in AZ. Since that's where she lives, and where the car will too....

Answer 2

Well, IF her legal address is AZ, as in she files AZ taxes and not CA taxes (meaning, you don't claim her as a dependent), she'll have to get an AZ insurance policy, you'll have to pay cash for the car, etc.

If you claim her as a dependent, it's not going to work - there's still a trail and you could be held liable.  Or, if you plan on having a loan on the car, it won't work.

Answer 3

You should talk to your attorney or accountant about liability risk and asset protection (for you).  "Buying a car, insuring it and letting her drive" it has TOTALLY different liability than "giving her cash and she happens to spend it on a car and insurance".  It also has different tax implications.

Whatever you do, be honest with your insurer.  If you choose to have your adult child on your policy, tell them she is the driver and she goes to school in Arizona. Absolutely do not try to trick your insurance company to get a lower rate; they'll declare fraud and refuse to cover any claims, which would bankrupt you in an injury accident.  You can't support your daughter if you're bankrupt.