A lot of people gift vehicles to their loved ones as a gift. And if this is something you want to do, make sure you understand all the requirements first. After all, you want a smooth transaction, not one that creates unnecessary stress for you and your family members. This applies whether you gift an old or new vehicle purchased at Barbour-Hendrick Honda Greenville.
Gifting the Right Way
As long as you gift a car to a family member the right way, you shouldn’t have any problems. Depending on your state, you may or may not need to pay taxes on the vehicle. For example, if you live in California, you can apply for a tax exemption. Go to a nearby Department of Motor Vehicles department.
In addition, if you live in Florida, you’re exempt from a bill of sale gift and an affidavit. However, in some states, you’ll get taxed on the automobile. Now, if you end up paying taxes, here’s how the state calculates the amount due. It uses the car’s fair market value. While you could sell the vehicle to your family member for $1, gifting is almost always the better route.
Because every state has unique laws about gifting vehicles to family members, take time to understand those in your state. Don’t sign the title until you determine if the DMV in your state requires notarization or a witness.
Different Gifting Scenarios
The most common scenario is that someone purchased a new vehicle. Because they have an older one that’s paid off, they decide to give it to a family member. However, some people gift cars to celebrate an accomplishment. For instance, perhaps a child or grandchild recently graduated from high school or college. As a reward, they’re given an automobile. Also, some people gift cars after the death of a parent or grandparent who owned them.
Key Things to Verify
In addition to the things mentioned, make sure there isn’t a lien on the title. That includes a standard loan, as well as a title loan. If you discover a lien, contact the holder to get it removed. Sometimes, that might entail paying off a debt if they refuse. However, if the lien’s already paid, go to the DMV to get the loan discharged.
In the case of inheriting a vehicle with the deceased owner on the title, you’ll need to go through probate court. That entails getting an order of transfer. In some states, you can file an affidavit with the Registry of Motor Vehicles. If so, contact them to understand all the requirements.
On the other hand, if the title lists two owners’ names, but only one of them has passed, the living spouse must transfer ownership. The goal is to have a clean title before you gift the car.
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The New Owner’s Responsibilities
Unless you have an agreement with your family member for something different, they’ll become responsible for taxes, insurance, and maintenance. So, it’s also important that the person receiving the gift understands their responsibilities after getting the vehicle.
When working with the DMV, you’ll need to bring specific documentation. That includes a copy of the clear title, proof of insurance, and the registration card for the vehicle. In addition, bring proof of identity and the money required to transfer the title.
Shopping for a New or Previously Owned Vehicle
If you’ve decided to gift an older car to a loved one, you’ll probably need a new ride. That’s where Barbour-Hendrick Honda Greenville in Greenville, North Carolina, can help.
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