Are you personally debating whether you should gift your vehicle or sell it for $1?
Perhaps you have a beloved family member that you would like to bestow a car to. Maybe it is a child of yours, who now wants his/her own set of wheels.
Or maybe you are ready to give a car to a friend or another special person in your life.
When deciding to gift a vehicle, there are two initial aspects to this which are car insurance and vehicle ownership. Is gifting a vehicle something you’re looking to do, but you’re not sure what methods to take to do so, continue reading and gather a better perspective on what will work best for you.
How Do I Give a Car as a Gift?
Now that you have reached a point in life of where you are deciding to gift a car, you may find the following steps helpful. Giving the gift of a car to a child, a spouse or a loved one can be one of the greatest gifts ever. With the new car owner, comes the responsibility of routine maintenance, gas and other requirements to maintain the car. But, for you as the individual giving the vehicle as a gift, check out the following steps to ensure a smooth transaction.
Pay the loan off
If there is any money owed on the vehicle, it is best to pay that money in full, before giving the vehicle as a gift. If you fail to meet all financial obligations regarding the car, you won't be able to gift a car or transfer a car title, because you will not own the car outright.
So, pay off any outstanding balances on any loans you have on the car and be sure to pay those balances on time, to maintain a good credit rating with the creditors.
Keep the giftee’s financial circumstances in mind
Once you decide to gift a car, it may be a good idea to think of the recipient’s financial situation. Let’s take a child of yours you are deciding to gift with a car, as the first example.
Is your child able to pay for oil changes for the car? Is your child able to afford items such as new tires, an engine or transmission if the car needs one? With a new car, these elements may not be of immediate concern, but if you are gifting your child with a used car, these aspects might be ones to consider.
Additionally, you may want to take into consideration your child’s driving habits. Is your child a responsible driver? If not, he or she may not able to afford car insurance, due to increases because of erratic and a less than stellar driving history.
For a spouse, the gift of a car is a true display of love. But, will you and the spouse pay for the car together?
Regardless of the love you have for the giftee, if the person receiving the car as a gift can’t afford routine maintenance, car insurance and other costs for the upkeep of a car, then giving a gift of a car may prove to be more of a penalty than a present.
Keep in mind the gift tax
Based upon where you live in the U.S. if you decide to gift a car, you may have to pay a gift tax on that vehicle.
As requirements differ each year, it’s something to keep in mind. Just as an example, if the fair market value of the car is more than $10,000 for a single person or $40,000 for a married couple, your gift taxes could range between 15% to 40%. The amount depends on the value of the car. It may be in your best interest to discuss your gifting a car with your local state DMV representatives and the required gift taxes owed on the car, before deciding to gift the car.
Are you the car’s owner?
One of the biggest bonuses of gifting a car is the fact that you don’t have to pay sales tax on it, if you own it free and clear.
It’s a given that car sales tax varies state by state. It’s also a given that sales tax can cost quite a bit of money.
For example, if the car sales tax in your state is 10% and you gift a $30,000 car, you can save $3,000 on sales tax. But if you purchase a car and then gift it, you will be responsible for the sales tax on the car’s initial purchase.
Create a Bill of Sale
If you have no contract or bill of sale, you could be financially responsible for the car you gifted. So, for your own records and protection, you may consider creating a bill of sale or a contract with the following details of your car:
- The make of the vehicle
- The model of the car
- The year of the car
- The amount that was paid for the purchase
- The VIN or the Vehicle Identification Number
- And if an older car, the odometer reading
Be sure to transfer the car’s title
Once you decide to gift a car and have taken care of all financial obligations for the car, be sure to transfer the car title.
It is your job to formally release ownership of your car to the person you're gifting the vehicle to. So, it is your job to transfer the car title.
Your local DMV is equipped in handling this. While each state varies by what is required, you can expect to pay a fee and complete some documents. Be sure to read up on your state’s laws or call your local DMV first, so that you are informed about all car title transfer fees and laws. You want to be as prepared as you can, once you give the gift of a vehicle!
Make sure that your giftee has great car insurance
What’s a car without car insurance? A car that just sits somewhere. So, if you have gone as far as gifting that certain special someone with a car, then perhaps you will go a bit further and help that giftee get car insurance. This would be especially helpful with a car you are girting to one of your children.
You may want to find a decent policy that protects him or her from as much as they can. For example, in the state of Florida (at the time this article was written), the average cost of insurance runs a driver a little under $2,000 per year.
Deciding to sell a Used Car
Perhaps you have a gently used vehicle that still has a few good years left in it and are now choosing to sell the car. In today’s day and age, you have lots of choices to sell that used car.
Selling a car online
Instead of gifting a car or selling it for $1, you may decide to sell the car and keep the cash. So, you look to sell it online. You peruse such sites as Facebook, Craigslist and Twitter. One aspect of selling a car online instead of gifting a car, is pictures. You have to take lots of photos of your car in order to sell it. Secondly, you’ll have to tell perspective buyers all about the car. Finally, comes the waiting for a serious buyer.
Instead of selling online, or even gifting that car that still has some great times ahead, you could sell that car to Cash Cars Buyer. With a car that is still able to be driven and is in a decent condition you could be looking at a decent payout!
Selling your car privately instead of gifting that car
Maybe your loved one may not need a car, so gifting a car is not a good idea. You may choose to sell the car privately. So, you decide to purchase some “for sale” signs and sell it in front of your property, hoping to entice perspective buyers. But after weeks and months of no hits, you find yourself frustrated. For a sensible and successful alternative to gifting your car, you can sell that car to Cash Cars Buyer. Even if your car runs, we will buy it and even tow it for free! And for a car that is in good working order, you could be looking at some wonderful cash!
Selling Your Car to Cash Cars Buyer Instead of Gifting Your Car
After careful thought, you have now decided to sell your car, instead of gifting it to your child or your spouse. So, what makes Cash Cars Buyer the best substitution to gifting a car?
- We will offer you cash on the spot!
- Once you sell your car to us, we will tow it away for free!
- We’re a licensed, bonded and insured company. We play no games as your car gifting alternative!
So, for that car that began as a gift, call Cash Cars Buyer and give the gift of cash to YOU!