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?

Compare car insurance rates for any make & model

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 bank 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 0% financing, rebates and discounts from $2,000 to $9,000.

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 cash back or 0% financing offers on the previous year’s models.

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 provider 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 Description Roadside assistance New car protection Available states
Progressive covers anything on wheels! Progressive offers coverage for cars, trucks, motorcycles and snowmobiles. Even Segways are covered.
Included free
Yes, cars under 3 year old & 15,000 miles
All 50 states
Enjoy having your own dedicated agent to help you get the best discounts and coverage.
Included free
Yes, cars under 2 years old
All 50 states
Car insurance through Liberty Mutual will give coverage options for almost any situation.
Yes, cars under 1 year old & 15,000 miles
All 50 states
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.
Yes, cars under 1 year old & 15,000 miles
Backed by nearly 100 years in the business, Farmers Insurance aims to offer options and support to help you find the coverage you need.
Included free
Yes, cars under 2 years old
All 50 states
Esurance offers a modern online and mobile experience that helps you take your insurance on the go. Available in 42 states.
Included free
Yes, cars under 1 year old & 15,000 miles
All states except AK, DE, HI, MT, NH, VT, WY
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
The General offers affordable coverage for nearly any driver who needs car insurance.
All states except Hawaii, Massachusetts, Michigan and New Jersey
Known for providing insurance to high-risk customers who may have trouble finding coverage elsewhere, SafeAuto offers a lot of different discounts, from those for homeowners to good drivers.
Included free
Discounts, flexible payments and a life coach that guides you to your best rates and coverage with Direct car insurance.
Elephant Insurance offers low-cost auto insurance with big discounts. Breaking from the national herd could save up to 40% off your current car insurance.
Not specified

Compare up to 4 providers

How do I transfer a gift 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.

Car title requirements by state

You typically have 30 days to transfer a title and will pay less than $15. Compare the title transfer grace period and fees for your state.

StateGrace periodTitle transfer feeForm download
Alabama20 days$15Download title transfer form
Alaska30 days$15Download title transfer form
Arizona30 days$4 plus registration fees and taxesDownload title transfer form
Arkansas30 days$10Download title transfer form
California20 days$15Download title transfer form
Colorado30 daysVaries by city and type of vehicleDownload title transfer form
Connecticut30 days$25Download title transfer form
Delaware30 days$35Download title transfer form
District of Columbia30 days$26Download title transfer form
Florida30 days$75Download title transfer form
Georgia30 days$18Download title transfer form
Hawaii30 daysVaries by cityDownload title transfer form
Idaho90 days$14Download title transfer form
Illinois30 days$95Download title transfer form
Indiana60 days$15Download title transfer form
Iowa30 daysVaries by cityDownload title transfer form
Kansas30 days$10Download title transfer form
KentuckyNo grace periodVaries by cityDownload title transfer form
Louisiana30 days$68.50Download title transfer form
Maine30 days$33.00Download title transfer form
Maryland60 days$100Download title transfer form
Massachusetts30 days$75Download title transfer form
Michigan30 days$15Download title transfer form/
Minnesota30 days$8Download title transfer form
Mississippi30 days$9Download title transfer form
Missouri30 days$11Download title transfer form
Montana60 days$10.30Download title transfer form
Nebraska30 days$10Download title transfer form
NevadaNone$29Download title transfer form
New Hampshire30 days$25Download title transfer form
New Jersey30 days$60Download title transfer form
New Mexico30 days$5 plus 3% excise taxDownload title transfer form
New York30 days$50Download title transfer form
North Carolina28 days28 daysDownload title transfer form
North Dakota30 days$5Download title transfer form
Ohio30 days$15Download title transfer form
Oklahoma30 days$11Download title transfer form
OregonNone$93Download title transfer form
Pennsylvania30 days$53Download title transfer form
Rhode Island30 days$51.50Download title transfer form
South Carolina45 days$15Download title transfer form
South Dakota90 days$10Download title transfer form
Tennessee30 days$11Download title transfer form
Texas30 days$28 or $33 (county dependent)Download title transfer form
UtahNone$6Download title transfer form
Vermont20 days$35Download title transfer form
Virginia30 days$15Download title transfer form
Washington30 days$12Download title transfer form
West Virginia30 days$15Download title transfer form
Wisconsin30 days$19.50Download title transfer form
Wyoming30 daysVaries by cityDownload title transfer form

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’s help. 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 member, 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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