The holiday season means gift-giving, and it also means winter sales events at dealerships. Most of us won’t be buying a new car this year, and especially not as a gift for someone else, but at some point, you may wish to gift an older car you no longer need to a friend or family member who does.
If you are considering gifting a vehicle to a beloved friend or family member this winter, here’s what you, and they, need to know.
This is the single most important question you need to answer before deciding to gift someone a car. If the person you want to give the car to is unable to afford car insurance, maintenance, gas, and vehicle registration fees, then gifting a car may not be the generous gift you intend it to be.
If you don’t have the title of the vehicle you’d like to gift, the next question you need to answer is, “are you still making payments on this vehicle?” If yes, then the lending company is the legal owner of the vehicle, and you can’t gift the car until you’ve finished paying it off.
If you do own the car free and clear of lien, but can’t locate the title, you can request a new copy from your local BMV, but you will need to pay a $15 fee.
The person gifting the car will need to fill out the seller’s portion of the transfer section on the title, and the person receiving the gifted car will need to fill out the buyer’s portion. Both will need to sign. The vehicle’s odometer reading is also required. In the field where it asks for the sale price, you may simply fill in “gift.”
After the title transfer section is filled out, the recipient of the car must take the document to their local Indiana BMV office within 45 days to complete the title transfer and register the car in their own name. They will need to present the title, proof of residency, and proof of vehicle inspection, as well as pay the $15 title transfer fee.
If you purchase the vehicle in full, then follow the same steps as above. If you are planning on taking out a loan, you could co-sign with the individual you are gifting the car to or take out the loan in your name alone and but title the car in both of your names. You may also consider gifting the down payment on a vehicle and allowing the recipient to handle financing on their own, if they are financially able to do so.
If the friend or family member you’d like to gift your car to lives in another state, you can gift your car to them, but you will need to follow the title transfer laws of that state, which may be different from those in Indiana.
The person you are gifting the car to will not be able to register the title in their name or legally drive the car without insurance. Advise them to purchase insurance before gifting your car to them.
You may only get a tax refund if you are gifting your car to a religious organization or to a 501(c)(3) charity and will not get one if you are gifting your car to an individual, such as a friend or family member.
You may be charged a federal gift tax if the car you’d like to gift is worth more than $15,000, but otherwise you will not be charged a fee.
The person you gift your car to will be required to pay a $15 fee to retitle the car in their name. If they fail to do so within 45 days, they may be charged a $30 late fee.
However, they will not be charged sales tax on gifted vehicles.
If someone you love has been injured in a car accident, then the Indiana car accident attorneys at Fleschner, Stark, Tanoos & Newlin want to help. We offer free consultations for anyone who has been involved in a car accident that wasn’t their fault, and if you decide to hire us, you pay us nothing unless we get you money for your injuries. Contact us today to learn what we can do for you.
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The financial burden that often comes with a serious injury can be too much for many people to bear. Unexpected medical debt, damaged personal property, and the sudden loss of income can impact the budgets of most families. The good news is that a successful injury claim could help reduce that financial strain after a serious accident. Get in touch with a Terre Haute personal injury lawyer with Fleschner, Stark, Tanoos & Newlin to learn more.
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