Gifting a Car to a Family Member

There are plenty of reasons you'll want to give a vehicle away. Not everyone is looking to trade or sell their vehicle off. With a little planning you can make it go smoothly. You'll need to take some steps to do this correctly. If the person receiving it is far away, you'll have to have it transported as well.

Reasons you gift your vehicle:

  1. A less fortunate family member needs a way to get around and you want to help.
  2. It is a low cost vehicle for a new teen driver to learn with.
  3. Has sentimental value and rather keep it in the family.
  4. Got a new car and don't want to sell or keep your old one.
  5. It's no longer possible for you to drive.
  6. You want to donate your vehicle to charity. (How nice of you!)

Be Sure of your Decision to Give it Away

It seems obvious, but be sure this is the right choice and that you can give it away to begin with.

Is It the Right Vehicle for Them?

Is this something the recipient wants? Can they afford the insurance, maintenance and understand the responsibility? Do they have a family of five and you are giving away a small 2-seater? You may serve them better by selling it and giving them the money to buy a car they can afford with he proceeds. They may need to pay taxes on it they can't afford. Are you also willing to pay their local title transfer fees? Theres much to consider. Be clear with the recipient of the vehicle.

Are You Shipping the Car ?

Be sure to get quotes for transporting it. Don't be caught off guard by underestimating the costs to ship the vehicle to them. Before you announce you are giving your car to them as a gift, you should be sure of what you will have to pay to get it there.

If the car is a surprise, it becomes a little difficult to keep that under wraps unless you make the delivery to a friend or family member you trust.

Are You Expecting a Tax Write-off?

Before you sign the title away, remember that only if you are giving the vehicle to a registered charity do you get to write off the vehicle's value. So aunt Susan can't give you a deduction.

If car's value is between $250 to $500, the IRS requires a proof from the charity in the form of a statement or receipt. It should have information that identifies the vehicle and that it was a gift with nothing given in return. This can be itemized this in Section A of IRS form 8283.

If you are giving away a vehicle worth more than $15,000, you'll actually have to PAY taxes on that gift! More information on tax implications here.

Properly Gifting Your Car

With a vehicle, you unfortunately can't just put it on a truck or drive it over to someone with the keys. It is still under your name and is your responsibility until it is properly transferred. You also want to be direct about the condition of the car.

Inform Them of What They Are Getting

Broken A/C, leaky oil-pan? Let them know. Sure, they will be happy that they have something to drive but you don't want them to find out about important issues before they become bigger ones.

Be direct, let them know if it's a clunker. They'll appreciate the fact that they now have a vehicle thanks to you, even if it needs a little TLC.

Title Transfer

It will be necassary to transfer the title of the vehicle to whom you are giving the vehicle away to. When giving to a charity, they usually handle it all. But when it's between you and a family member, you will have to worry about those details.

To get started, you can do a quick search for your local department of motor vehicles. DMV.ORG's page also lets you pick your state from a map and provides very detailed instructions.

Each state will have slight differences on how they do this. But the outline of what to do is pretty much the same everywhere.

  1. If the vehicle is financed, you don't have the title to it. It belongs to the bank until you pay it off. Remember, you should not gift a vehicle that you owe money on.
  2. Get the vehicle's title. If you can't find it, you'll have to get a replacement. It's best to have a physical title when shipping a car to another state because the recipient's state won't usually share electronic records with another.
  3. Prepare a bill of sale. Many states require it. Here's a free generic one. Write in "GIFT" on the sale amount.
  4. Remember to sign the title and bill of sale, then send it to the new owner.

Clean Out the Vehicle

You might not be running the carwash, but you at least want to make sure your personal stuff is out of there. Nobody wants their limited edition Celine Dion greatest hits CD to fall into the wrong hands.

Arranging Transport

Transporting this vehicle? You'll also want to be sure that you disclose any issues or leaks if the vehicle has any so the truck can place the vehicle accordingly.

Give yourself time to plan for the truck to come and pick it up. Most carriers need a couple of days notice before they arrive at your door to come get it.

Carl has a decade of experience in the car shipping industry. He has worked in nearly every aspect of the transport business since 2014, taking charge of various roles in the company such as dispatching, sales, and customer service.

During those years, Carl amassed an invaluable amount of experience which has contributed to his writing of every article and and guide on NX since taking over content in 2015.