The holiday season means bundling up against cold weather, spending time with friends and family, and of course, gift giving. And we’ve all seen car commercials this time of year featuring a brand-new luxury sedan or SUV waiting in the driveway for a smiling spouse with a large gift bow on the hood.
While surprising a loved one with a new car isn’t in the cards for most of us this year, there are many reasons why you might decide to hand off an older car to a friend or family member. However, the legalities and complexities of gifting a car aren’t as simple as handing over the keys.
Steps to Gifting a Car
If you are gifting a car you already own:
- Make sure you’ve paid off the car fully—if there is still a lien on the car, you won’t be able to gift it without a lien release.
- Locate the vehicle’s title. You will need this document to legally complete the transfer of ownership. If you can’t find it, you can request a duplicate copy from your local MVD.
- Locate the vehicle’s current registration. You will need to provide this document to the person you are gifting the vehicle to.
- Fill out the title assignment portion of the title document, including odometer reading. Both the gifter and the recipient need to sign, but the gifter will also need their signature notarized.
- Under purchase price of vehicle, fill in “gift.”
- If you are gifting to a spouse, parent, or child, you will need to complete a Family Affidavit to ensure they don’t need to pay sales tax.
- Notify the MVD that you’ve gifted the vehicle. You will need to fill out a Notice of Transfer of Ownership and pay a $10 filing fee.
- The recipient will need to bring the signed title and vehicle registration, as well as proof of insurance, to their local MVD and pay a $17 title transfer fee.
These rules apply to Oklahoma. If the person you are gifting the car to lives in another state, you should follow the title transfer laws of that state, which may differ slightly.
If you are buying a car as a gift:
In most cases you will be gifting a car you already own, but if you would like to help someone you love afford a new or pre-owned car, there are four main ways to go about it:
- Purchase the vehicle in full, and then follow the steps outlined above.
- Gift the down payment on a vehicle from a dealership, but allow the gift recipient to handle financing the vehicle on their own.
- Co-sign on a loan for a vehicle.
- Take out a loan in your own name (this allows you to keep the gift a surprise, if you would like to) but register the title under both your name and the gift recipient’s name.
What Everyone Considering Gifting a Car Should Know
The most important step to gifting a car is to talk with the person you’d like to give the car to. Owning a car comes with a lot of added expenses, and if the recipient is unable to afford car insurance, gas, maintenance, and other costs and fees, then it may not be the right decision to gift them a vehicle that may put them into debt, even if they won’t need to make car payments.
How Gifting a Car Reflects on Your Taxes
In most cases, gifting a car won’t affect your taxes for good or ill.
You will not be able to get a tax deduction for gifting a car unless you are gifting it to a religious organization or to a charity.
As the giver, you won’t be charged a gift tax unless the car you wish to gift is worth more than $15,000. Likewise, the recipient won’t be charged tax unless the car that is gifted is worth more than $15,000.
Need Money After a Wreck? Talk to the Lawyers at Parrish DeVaughn
If you or a loved one have recently been in a car accident, you may need to replace your car and may even be suffering from serious injuries. Don’t let your medical bills put you into debt, especially if the accident was caused by someone else. Contact the Oklahoma car accident attorneys at Parrish DeVaughn for a free case review.
When you hire our team, we will work hard to build a claim that proves your accident wasn’t your fault and negotiate with the responsible party’s insurance company to get the highest compensation possible. If they won’t pay what your injury is worth, we will take them to court without hesitation. And at Parrish DeVaughn Injury Lawyers, you don’t pay us unless you win.