If you’re going to be gifted a car or give a car to someone else, you should follow the law and do things right. That helps ensure the vehicle will be transferred properly so it can be used by you or anyone else it’s been gifted.
It will also need to be titled and registered to the right person.
What Is a Gifted Car Bill of Sale?
A gifted car bill of sale is designed to provide information about the person who owns the car and the person it’s being gifted to, along with information about the vehicle and the transaction.
This bill of sale is essential, even though you’ll also transfer the title.
When you have a bill of sale, it helps verify what’s being done and ensures the person who gifted the car is no longer responsible. Even though gifting a car isn’t technically a “sale,” you still provide a bill of sale because that document and the title give the details needed to transfer the vehicle successfully.
Do You Need a Bill of Sale for a Gifted Car?
Some states require a bill of sale for any vehicle transaction, and some don’t; it’s a good idea to provide one either way. That way, you don’t have to worry that the car won’t get transferred correctly.
What to Include in a Gifted Car Bill of Sale
When you create a bill of sale for a gifted car, it’s essential to be clear about what goes in it. You should include:
- Seller’s full name and address: The full name and address of the seller (or gifter) are required.
- Buyer’s full name and address: Like the seller, the buyer’s (or recipient’s) full name and address are also required.
- Vehicle information: Vehicle information includes the make, model, and year, along with the price, color, body style, VIN, and vehicle condition.
- Odometer reading: The odometer reading and a statement about whether it reflects the actual mileage are required.
- Signatures: The buyer and seller should print their names, sign the bill of sale, and date it.
How to Gift a Car
Gifting a car to a family member isn’t tricky, but it does have to be done correctly. You should ensure you follow the required steps in your state to transfer the car successfully.
You’ll need to talk to the gift recipient first to be sure they’re ready to take on the vehicle. Even though they’re getting it for free, there will still be insurance and other costs for them to consider.
Step 1 – Using a Bill of Sale
The gifted car bill of sale is a big part of gifting a car. Ensure you fill it out correctly so your recipient can transfer the car’s title to their name. Many states require a bill of sale to do that, and if it doesn’t contain the correct information, it won’t be able to be used.
That could delay the transfer and cause frustration that’s easily avoided.
Step 2 – Transferring the Car Title
After completing the bill of sale, the title must be signed and filled out. Then the person you’re gifting the car can take the title to the DMV and transfer it into their name.
If you live in the same area, you might want to go with them for this step, just in case of any questions.
You don’t technically have to do that, though. As long as everything is filled out correctly and the recipient has proper identification, they should be able to transfer without having you there.
That’s especially important if you don’t live nearby or in another state where you can’t quickly go with them to share the title from your name to theirs.
Step 3 – Insuring a Gifted Vehicle
If you’re gifting a vehicle, be sure the recipient understands they’ll need to get insurance on it. As soon as it’s transferred to them, you won’t cover it anymore. It’s a good idea to coordinate with them carefully to avoid a lapse in coverage that could put you or them at risk, depending on who technically still owned the car at the time.
How Much Is Gift Tax on a Car?
Gift tax on cars can vary, and in some cases, there won’t be any tax to be paid. You might have to pay gift tax if the vehicle is worth over $15,000. The person getting the car won’t have to pay, and they shouldn’t have to pay sales tax.
For a vehicle valued at more than $15,000, you and your spouse (if you have one) can gift it together, which doubles the exemption to $30,000 and avoids the gift tax.
How Do You Write a Bill of Sale for a Car as a Gift?
When you write a bill of sale for a car as a gift, you must include everything the DMV will require.
- First, be sure the seller (or person gifting the vehicle) fills out their full name and address information. Their name must match the one on the title, even if they generally go by a nickname or a different name. The same is true for the person receiving the car. Their legal name and address information has to be included, and it needs to be accurate and complete. If you’re unsure about any part, let them fill it out or ask them before you complete that section.
- Next, add the vehicle information. That includes all the main details, and it’s vitally important that you ensure the car’s VIN (vehicle identification number) is correct. This is like a social security number for a vehicle, and it helps the DMV identify the exact car you’re gifting.
- The odometer statement must also be included, noting whether the mileage is accurate, inaccurate, or over its mechanical limits.
- Once all this information is provided, the gifter and recipient will sign, print their names, and date the bill of sale so it can be used during the car transfer.
Gifted Car Bill of Sale Sample
If you want to be sure you’re putting everything into your gifted car bill of sale that the DMV will require, you can use a template. That way, you’ll have peace of mind, and all the needed information will be available to the recipient of the car.