There are different reasons why you might decide to give a vehicle as a gift. You may want to give it to a relative, such as a child who has obtained a driver's license. Maybe you want to donate it to buy a new vehicle and you don't want to sell the old car. Either way, the basic step in giving a car is transferring title, but there are certain details that can make this task more complex. You must make sure that you are the full owner of the vehicle. This means that there cannot be a lien on it. If you own the vehicle together with someone else, you will also need to provide their signature (except in rare cases, such as death, in which case you will need the assistance of the probate court and the executor of the deceased's estate). Once the title is signed in the name of the new owner, you will need to present it to the Department of Motor Vehicles to complete the transfer. Read on to find out how to give a car in America.
Steps
Part 1 of 3: Prepare for the gift transfer
Step 1. Verify ownership
Of course, this will seem obvious, but the first step in taking a vehicle is to make sure you are the legal owner. To do this, you must have the title. The title is a certificate that you should have received from the dealer, possibly after paying off all the loans. The title names the owner or legal owners of the vehicle.
If you have lost your certificate of title, you will need to obtain a replacement through the Department of Motor Vehicles (DMV). Each state has a different procedure and fee for replacements. At http://www.dmv.org/replacing-a-lost-title.php you can find a useful map of the United States with contact information for the DMV in each state
Step 2. Comply with all liens
A lien holder is a person who has lent you money with your car as collateral. If you still owe him money, his name will be on the title. Before you can give the car away, you will need to pay off all the loans, and the lien holder will need to sign a certificate of title that they have received the payment.
Step 3. Go to probate court, if it is an inheritance
If the title owner's name is someone who has passed away and the gift is an inheritance, you will need to go to probate court to obtain an order for the transfer. On the other hand, in some states, it is possible to file a simple affidavit with the Registry of Motor Vehicles to take possession. Therefore, it is best to check your state laws.
For example, if the car has been jointly owned by a married couple, and one dies, and the remaining owner wants to give the car away, the surviving person can, in most cases, transfer the vehicle on their own. The title may need to be accompanied by a death certificate
Part 2 of 3: Fill out the papers
Step 1. Complete the transfer section on the back of the title
The person giving the vehicle as a gift will need to provide their signature, driver's license information, and vehicle odometer information at the time the gift is made. The person receiving the vehicle will need to complete the buyer's portion of the title. In the part where the price of the vehicle should be included, write “Gift”.
Be careful when completing these steps. Many certificates of title specify that it must be written clearly and neatly, without erasure or crossed out. Even a simple printing error could result in you having to obtain a fresh copy of the certificate of title and start over from scratch
Step 2. Have the liens holders sign
If the lien holder has not yet provided you with a document showing that you have complied with the loans, you will need to have him sign the title as proof that you have fully complied. If the loan was made by a dealer, contact the loan department. If you have obtained the loan through a bank or other lending institution, find the original loan papers to find the contact information of the person with whom you should contact.
Step 3. Check with your state Motor Vehicle Registry for additional gift-giving requirements
Generally, gifts between family members are freely allowed, so there will be no sales tax at the time of transfer. However, each state law is different, so you should check which laws are in effect where you live. Some states require proof of family relationship for the gift to be tax-free.
Step 4. Verify the recipient's insurance
The person who receives the car will normally have to show that they are covered by insurance before taking possession. This is not exactly a concern for the gift giver, but the new owner will need to obtain insurance and registration to drive the vehicle. Generally, the new owner's insurance company will issue you a card or letter as proof of insurance.
Step 5. Verify the inspection requirements
Some states require the car to be inspected separately at the time of transfer. Other states do not require it. You can check with the Department of Motor Vehicles for requirements. In many states, this requires you to take the car to an authorized inspection station for a safety inspection, emissions test, or other similar procedures.
Part 3 of 3: Complete the transfer
Step 1. Submit the documents to the Motor Vehicle Registry
In many states, the person receiving the gift will have to bring the completed documents to the Registry of Motor Vehicles. The original title must be delivered with the signatures and the required rate.
Step 2. Register the vehicle according to the usual procedures of your state
This will have to be done by the new owner of the car. Registration is the procedure in all states that certifies that the car can be licensed and driven in the state. In most states, you can contact the registry in advance to request an appointment.
Step 3. Wait to receive the new title
As the recipient of the vehicle, you will need to receive a new title. The registry will send you a title with your name on it, which usually takes a few weeks. When you receive it, please review it to make sure the information is correct. This document will be your proof of ownership of the vehicle. If there are any errors, even if they seem minor (such as an incorrect middle initial), it could lead to problems in the future. If you spot an error, report it to the Registry of Motor Vehicles immediately. You may need to submit a request for correction.
Advice
- In some states, it is allowed to charge a nominal fee for the car to avoid a tax on the gift.
- Some titles must be certified by a notary public. In this case, the signatures and dates should not be included until in the presence of a notary. A notary public will offer free services, and you can find them in many banks and town halls.
- If you don't have a copy of the car title, you can contact the Department of Motor Vehicles or the lien holder to get one (if you recently paid the lien).
- When you present the title at the DMV, the recipient can obtain the registration and license plates for the vehicle received as a gift.