Originally Posted by Scottyoh
This is exactly the same thing used car dealers do. The buyer never sees the title until it is in their name.
It's legal, at least in my state, for dealers to do this... there is even a couple of spots on the back of the title that says "for transfer by incensed dealer only" or something like that, and they can even add additional "back" pages if they get filled up before an actual buyer comes along. Since they are buying to resell there isn't any tax for them to pay.
I think most individuals do it to save from having to pay sales tax or title fees if there is no sales tax applicable.... that probably makes it illegal. But lots of people do it.