Correct. Many states have laws where if you sell over a certain number of vehicles a year, you're considered a used car salesman and must register and get licenced. In addition, if you register the title in your name, you have to pay taxes in most states, just to turn around and sell it to somebody else who also has to pay the same taxes.

Some states also take into account intent. Meaning that you need a dealers license and insurance just to purchase and sell a single vehicle, if the original intent of purchasing the vehicle was to sell it.

In my state, Oregon, for example, the DMV has agents watching craigslist, facebook, autotrader, etc. who go test drive private party cars under cover and ask the question, "So, why are you selling?" where answering that question incorrectly (along the lines of, "oh I bought it to fix up and make a few bucks") will net you a several thousand dollar fine.

That's such a scummy enforcement tactic since it's literally going out of its way to screw over people who are taking initiative to try to make money. It's not like they're flagging transactions at the paperwork stage.