Gifting a car the right way |
How to give someone a car as a gift

How to give someone a car as a gift

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The right way to gift a car this holiday season.

Gifting someone with a car is a strong move. Toss one of those big red bows on it, and you’ve officially won the day. But while a car is a great present, it can be an unwanted hassle for you and your recipient if you’re not prepared.

Questions to ask before giving someone a car

Before you pull the trigger on such a substantial purchase, think about your recipient’s needs.

Do they actually want a car?

Before you even think about buying a car for someone, ask yourself whether they even want it in the first place. While your motives might be genuine, some people just don’t want or need to drive. If they live in a city like New York, for example, you may be giving the gift of gridlock and parking problems.

What type of car do they want?

If you know the car they want, make sure you also know the type. Sure, it’s the thought that counts. But do you want to throw thousands down on a vehicle only to see your giftee’s joy fade when they see you bought them something different from what they asked for?

Should you take them to the dealer?

If you know the type of car they’re after, consider taking them along to a dealership for their final say on the trim specs. You can also buy the car and insurance in their name to save yourself the added stress of transferring a title.

Who will pay for the car?

Ask yourself if you can afford to shell out for the entire cost of a car and if the person you’re giving the car to can afford to insure and maintain it. Some high-end cars not only have an expensive price tag, but also cost a lot to insure.

If you’re buying a car for your significant other and you have a shared account, you may want to look at paying in cash or getting a car loan so you can keep the gift a secret.

Which new cars offer the best holiday discounts?

Most car brands promote holiday deals on 2018 models, including discounts, cashback offers, financing bonuses and 0% interest deals.

Check with your local dealership to learn if the car you’re considering gifting will be on sale over the holidays. Typical offers include:

  • Cadillac Escalade — $7,000 off
  • Chevrolet Equinox LT up to $5,000 off
  • Chevrolet Malibu —up to $5,000 off
  • Fiat 500X — $6,750 discount for drivers with poor credit
  • Ford Fusion — $1,750–$5,000 off Hybrid and Energi models
  • Hyundai Sonata —$2,000 to $3,750 off
  • Jeep Cherokee — $3,000 to $5,000 off
  • Kia Soul — $2,000 to$3,000
  • Nissan Murano up to $5,000 off
  • Nissan Titan — up to $10,000 off
  • Ram 1500 $9,000 $to 11,000 off Crew Cab edition
  • Volvo V90 — $6,750 off V90 Wagon trim

Must read: Lexus December to Remember

Like many car manufacturers, Lexus focuses on clearing its lot through an end-of-year sales event. The annual December to Remember campaign is tied to the holidays, with Lexus offering deals on a range of makes and models, including 0% financing offers on several 2018 models or up to $3,000 cash back on a 2018 GS 350 or Hybrid, IS 300, GX 460, IS 300, LC 500 or RC 300.

How do I insure a car in someone else’s name?

Because you’re buying the car as a gift, you’ll want to insure it in the recipient’s name. Whether you pay for the coverage is up to you, but you’ll likely need to have it in place before driving the car off the lot.

If the driver doesn’t have existing coverage, you have two main options:

  1. Take them to the lot with you. This way, both the title of ownership and the insurance can go directly in their name when you buy the car.
  2. Buy the car and transfer ownership. When you’re transferring the title, make it clear it’s a gift, or you could be on the hook for taxes, depending on your state.

How long do I have to insure a car after buying it?

If you already have insurance for another vehicle, your policyholder may offer you temporary coverage for the new one. Periods can be anywhere from a couple of days up to an entire month, so check your policy and your state’s requirements to see what kind of grace period you have.

Also consider where you live, as extension coverage can vary widely by state.

Compare insurance providers

Name Product Roadside assistance New car protection Available states
Included free
Yes, cars under 2 years old
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
Yes, cars under 1 year old & 15,000 miles
All 50 states
Car insurance through Liberty Mutual will give coverage options for almost any situation.
Included free
Root offers simple, affordable insurance that’s ideal for good drivers. Try the Root app for 2 weeks and see how much you could save. Available in 20 states.
Included free
Yes, cars under 1 year old & 15,000 miles
All states except AK, DE, HI, MT, NH, VT, WY
Esurance offers a modern online and mobile experience that helps you take your insurance on the go. Available in 42 states.
Yes, cars under 1 year old & 15,000 miles
Drive less than 30 miles a day? Save on the coverage you need with pay-per-mile insurance from Metromile. Get a low monthly rate then pay just a few cents per mile. Available in AZ, CA, IL, NJ, OR, PA, VA and WA.

Compare up to 4 providers

How do I transfer the car title?

Transferring the title of a car depends on where you live. If you’re buying new, the dealership should handle most of the paperwork.

In most states, you should:

  • Look up local requirements on transferring car titles in your state.
  • Head to your local DMV.
  • Hand over your signed and completed title that includes info like the odometer and damage disclosures.
  • Show proof of insurance.
  • Complete a title application or vehicle registration form.
  • Fill out the Statement of Transaction, including a note that it’s a gift.
  • Pay the title fee — typically under $20 — and any other costs.

How to present a car as a gift and keep it a secret

There’s no wrong way to wrap up a car, like the always classic red car bow, of course. You could also put the keys in a jewelry box, though you could inadvertently dash expectations if you’re gifting it to your partner and you’re not married.

Consider the lucky giftee’s personality and what they’d respond to the most. You’ll find few wrong turns when giving the gift of a car.

Keeping the car a secret is another matter, one you might need an accomplice for. Ask the dealership if they deliver, or see if you can leave the car at a friend’s house and drive it over Christmas morning. Park it around the block or keep them from going outside until you’re ready for the big reveal.

Bottom line

Gifting a car can be a thoughtful gift for a close friend or family, but it comes with some risk. Considering taking care of the title and insurance with a current insurer or by purchasing a new policy.

Frequently asked questions

Richard Laycock

Richard is the Insurance Editor at finder, and has been wrangling insurance Product Disclosure Statements for the last 4 years. When he’s not helping Aussies make sense of the fine print, he can be found testing the quality of Aperol Spritzes in his new found home of New York. Richard studied Journalism at Macquarie University and The Missouri School of Journalism, and has a Tier 1 certification in General Advice for Life Insurance. He has also been published in CSO Australia and Dynamic Business.

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