How to Transfer a Car Title to a Family Member
JUMP TO:
● What is a car title and which vehicles need one?
● When do you need to transfer a car title to a family member?
● What to do before you transfer a car title
● How to transfer a car title if you are selling a car
● How to transfer a car title if you are gifting a car
● Will my family member need to pay tax on their vehicle?
Are you in a situation where you’ve recently upgraded your vehicle, need more passenger space for your growing family, or have a vehicle that no longer fits your lifestyle? Perhaps you have a newly licensed teen who needs a vehicle to drive or a relative who’s in need of transportation. If any of these apply, you may be considering transferring your car title to a family member.
Depending on the state you reside in, the process of transferring a car title can vary. However, this article aims to provide a clear explanation of the title transfer process for both selling and gifting a car to a family member. This information will make it easier for you to navigate regardless of your situation.
What is a car title and which vehicles need one?
A car title is a legal document that establishes ownership of the vehicle. It typically includes information like the vehicle’s make and model, its VIN (vehicle identification number), the odometer reading, the owner’s name and address, any existing liens, and the date of sale, although this may vary per state. The car title is issued every time a new owner obtains a vehicle, and all 50 states require that a title application be completed anytime ownership is transferred to a new owner.
Depending on the age of the vehicle, some states may or may not require a title for proof of ownership. For example, the following 10 states will accept alternative documents, like a bill of sale or active registration, for older used vehicles in lieu of a title:
• Alabama: Vehicles that are older than 35 years old.
• Connecticut: Vehicles that are more than 20 years old.
• Georgia: Vehicles manufactured in 1962 or earlier.
• Louisiana: Vehicles that are 25 years old or older.
• Maine: Vehicles that are older than 25 years old.
• Massachusetts: Vehicles manufactured in 1980 or earlier and purchased before November 26, 1990.
• Mississippi: Vehicles manufactured in 1969 or earlier.
• New Hampshire: Vehicles manufactured in 1999 or earlier (except for heavy trucks).
• New York: Vehicles manufactured in 1972 or earlier.
• Vermont: Vehicles manufactured in 2009 or earlier.
Note that this is accurate at the time of publication — always check your local regulations for the most up-to-date circumstances in your area. Although these states don’t require a title for older vehicles, be sure to check what other documents are valid when you transfer car ownership to a family member.
When do you need to transfer a car title to a family member?
When you gift a vehicle to a relative or sell it to them, you need to transfer the vehicle title as soon as possible. Failure to do so may lead to legal ramifications as well as render your relative’s ownership of the vehicle invalid. That means they won’t be able to register the vehicle under their name, and you’ll still be legally responsible.
What to do before you transfer a car title
In many states, transferring the title requires more steps than simply signing off on a document. Here’s what you’ll need to do before you transfer a title to a family member:
• Ensure your relative has an active and valid driver’s license. If it’s expired, they’ll have to renew it before getting back on the road.
• Check that your family member has automobile insurance. They’ll need to bring this, along with other documents, to the DMV (used generically for the Department of Motor Vehicles, Bureau of Motor Vehicles, Dept. of Licensing, many automobile clubs, etc.) to complete the title transfer.
• Gather the appropriate documents. At the very least, have your relative bring the original car title signed by you, proof of their insurance, the bill of sale, any necessary affidavits, and the car’s current odometer reading. Be sure to check local DMV guidelines to ensure you’re not missing anything.
• Notify the buyer or gift recipient of upcoming fees. When they get to the DMV, they’ll usually need to pay for the registration fee, if required in their state, perhaps a new license plate, and applicable sales tax. Giving them a heads-up will help better prepare them for the titling and registration process.
• Clean up the vehicle you’re giving away and run a quick maintenance check. Take it through a car wash, check its fluids and brakes, and vacuum and shampoo the interior. This considerate gesture will make gifting or selling it to a family member all the more special.
Remember, legally transferring your car to a relative involves research and a sound understanding of what’s required at the DMV, so make sure you and your loved one are prepared to make this transaction as smooth as possible.
How to transfer a car title if you are selling a car to a family member
Even if you’re selling a car to a family member, you have to go through the same process you would selling it to a stranger. Here’s how to sell a car to a family member, assuming that the vehicle you’re selling has no loans:
1. Research market prices for your exact make and model and settle on a fair price. You don’t want to sell it at an unfair price, but you also don’t want to set a price that’s so low that the DMV will be questioning the validity of the transaction.
2. Use an official bill of sale document or template from your state to record the financial transaction. Some states require this document for legal purposes. Be sure that it’s completely and accurately filled out.
3. Sign the title over to the new owner. If you’re a co-owner of the vehicle, some states will require all owners to sign the document for the transfer to be valid.
4. Take off your license plate before you give the vehicle away unless you live in a state where you don’t have to.
5. Complete the Transfer of Title application at the DMV. Your family member will need to bring the bill of sale, signed title, a form of identification, and any other documents their state requires. It would be a good idea to accompany them to their DMV appointment as the seller, in case they’re missing a signature from you or need clarification on certain items.
Again, this process is for transactions that don’t involve any outstanding loans or liens. Also, be sure that you and your loved one consult your local DMV for exact directions on how to carry out this transaction in your state.
How to transfer a car title if you are gifting a car to a family member
While you may be tempted to just pass on the car keys to your relative and call it a day, there are several steps you need to take in order for your family member to be considered the legal owner of their new ride. Each state has its own set of requirements for the car gifting process, but in general, you’ll need to complete the following steps.
1. Pay off any auto loans
Be advised that before you can gift a car to a family member, it’s a requirement to have all loans paid and liens cleared to obtain the title. Until then, the lender you’re making payments to is technically the owner of the vehicle, meaning it can be repossessed if the loan is left unpaid. This is particularly important to consider if you’re planning on buying a car as a gift.
You can consider transferring the loan to your relative but note that not all lenders allow for it. If they do, you’d have to also consider your family member’s financial health and whether the lender will approve them as a borrower. Either way, be sure to discuss this with your relative before you proceed with the transaction and always follow your state’s guidelines for gifting vehicles.
2. Consider your relative’s finances
Even if you’re gifting a car to someone with no loans or liens attached, there are still several expenses associated with vehicle ownership that your relative will need to be responsible for. These include routine maintenance and repair costs, fuel costs, insurance payments, and annual registration fees. Depending on how often your family member will use their car, these costs can quickly add up.
3. Know the current gift taxes
The Internal Revenue Service (IRS) requires that you disclose any vehicle transfers to individuals with minimal or no monetary compensation, provided the vehicle’s market value exceeds $18,000. That means you’ll need to disclose this information when you file your tax return and potentially pay taxes on the vehicle’s fair market value if it surpasses the $18,000 threshold. For assistance, contact a tax professional for more information about how this applies to your situation in the state you reside.
4. Collect the proper documentation
When it comes to title transfers, each state has its caveats. For example, many states require that you complete an Affidavit of Motor Vehicle Gift Transfer if you’re gifting your car to someone else, while others require proof of a safety inspection and/or passed emissions test. Always consult your local motor vehicle agency for guidance pertaining to your specific jurisdiction.
5. Complete a bill of sale
While not required in some states, completing a bill of sale during the gifting process is always a good idea. Essentially, it documents the ownership transfer as well as any monetary exchanges that took place. Since you’re gifting the vehicle, you can simply write “$0” for the vehicle’s sale price. The bill of sale also usually states the vehicle’s VIN, make, model, odometer reading at the time of the transaction, and the signatures of both parties involved.
6. Sign over the title
It’s important to fill out the title in its entirety. You’ll need to sign your name as the seller and have your relative sign their name as the buyer. Note that your relative will still need to apply for a title of their own, using the signed title as proof that you rescind ownership of the vehicle.
7. Complete the transfer at a DMV (or local equivalent)
In most states, the giftee can finalize the vehicle transaction on their own by applying for a title, registering the vehicle under their name, and obtaining a license plate. Nevertheless, it’s a good idea to have all parties present in person. Generally speaking, your relative will likely need to bring the signed title, proof of car insurance, a form of identification, and funds to pay for all processing fees (unless you choose to cover this for them). Be sure to always check your local DMV for exact requirements and documentation needed as it varies per state and county.
Will my family member need to pay tax on their vehicle?
It depends. In many states, relatives are typically exempt from paying a sales tax on a gifted car. For instance, in New York, family members who complete a Statement of Transaction form can receive a sales tax exemption. Likewise, Florida rules state that if a car is gifted, the new owner is exempt from paying the sales tax, so long as they declare exemption on their application for a certificate of title and have a sworn statement that documents that the vehicle was given as a gift (such as a bill of sale or Affidavit of Motor Vehicle Gift Transfer). Of course, this is not always the case, so double-check your state’s tax laws to see whether an exemption is possible.
Transfer confidence when you pass on a Mazda vehicle
Visit your local Mazda Dealer or the Mazda line of vehicles online to find the right car to gift to a family member.
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When the car you’re giving away or selling is completely paid off with no liens attached, both parties are in the same state, and your state requires nothing more, then technically, yes. Otherwise, the process can quickly become complicated. Regardless, it’s highly recommended that you take additional measures to protect all parties involved. That means completing a bill of sale, or in some cases, an affidavit that validates the nature of the transaction.
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Oftentimes, the beneficiary of the deceased owner can help you obtain the title to the owner’s vehicle. This usually involves them bringing the death certificate to the DMV and showing proof of their relationship to the owner. Then the beneficiary can help transfer the title as if they were the original owner of the vehicle.
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Whether you’re selling or gifting a car to a family member in another state, the process for transferring the title is generally the same — you’ll just need to follow the rules for both DMV agencies involved. That means gathering all mandatory documents required in both states so that the process is seamless for all parties.
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Yes, some states offer online title transfer services to make long-distance transactions easier. Check in with your local DMV office to see if this is an available service.
This article is intended for general informational purposes only and is based on the latest competitive information available at the time of posting. Information herein is subject to change without notice and without Mazda incurring any obligations. Please review a variety of resources prior to making a purchasing decision. Visit Resource Center for more articles.