When a vehicle changes owners by gift, a title transfer must be completed. The title transfer procedure varies slightly from one state to another, but there are a couple of requirements that are common for all states.
Transferring the vehicle title is the first step of the procedure. The first thing that a person who wants to give a vehicle as a gift needs to do is make sure that they are the legal owners of the vehicle. That means that they have to check whether there is a lien on it. If there is a lien on the car, it can not be transferred as a gift.
Have the Proper Documentation in Place
Documents that are needed to complete a title transfer when giving or receiving a car as a gift include:
Bill of sale
Proof of residency
Proof of identification
The person giving the vehicle has to fill out the required fields on the title, which include odometer information and driver’s license information. Also, those giving the vehicle must sign the title. In some states, an odometer disclosure statement might be required, for vehicles that are less than ten years old.
A bill of sale is required for vehicles that have not been previously titled.
Having Insurance is Essential
Then, the donor has to make sure that the person receiving the vehicle is insured and have the recipient sign the title, as well. Most states require the recipient to provide proof of liability insurance coverage before allowing a title transfer to be completed. Also, the recipient must notify their insurance provider that they have received a vehicle as a gift.
In addition to the above-mentioned documents, the recipient has to pay the title transfer fee. As far as sales tax is concerned, those receiving a car as a gift are exempt from paying it.
The recipient should then apply for new license plates or transfer existing plates from another vehicle they own. Also, some states allow the gifted car’s license plates
Finally, the person giving the vehicle has to submit the filled out and signed title to the Department of Motor Vehicles, which is when the transfer can be completed.
To sum up, the title transfer procedure for gifted cars can be a bit tricky, so in order to complete it in a timely manner, both the recipient and the person gifting the car should gather all the documentation beforehand.
The donor has to fill out the car’s title and sign it. They also have to make sure that they are the legal owner of the car, which means that there is no lien on it. The recipient must provide proof of liability insurance coverage before the transfer can be completed and to pay the title transfer fee.