Selling or Gifting a Car to Family? (The Paperwork)

The bottom line: Selling or gifting a car to a family member takes the same core documents: a signed title, a bill of sale, an odometer disclosure, and your state’s DMV transfer forms.

The main difference is the price you write. For a sale, write the actual amount, and for a gift, write “$0” or “GIFT.”

In 28 states, your family member submits a gift form at the DMV to claim the tax exemption. In the other 23 there’s no gift form: most take the exemption on the title application, and a few have no exemption at all.

Who qualifies for the tax break is the part people get wrong. Some states publish a closed list of relatives, while others only ask whether money changed hands. Compare offers from multiple buyers before you set a price.

Key Takeaways

Filing the release of liability with your state DMV is the step most sellers skip. Miss it and you’re legally responsible for tickets and accidents after the car is gone.

Three different rules decide the tax break. Some states exempt a named list of relatives. Some charge those relatives a reduced flat rate instead. Others ignore the relationship entirely and only ask whether money changed hands.

Siblings, grandparents and in-laws are the ones that catch people out. Each is excluded somewhere and included somewhere else.

Selling for $1 doesn’t save anyone taxes. The DMV taxes whichever is higher, the price you write on the title or the car’s market value.

The federal gift tax threshold is $19,000 per recipient for 2026. Most family car gifts stay well under this and require no IRS paperwork at all.

Kentucky, Louisiana, North Carolina, Ohio, Oklahoma, Pennsylvania and Wyoming require the title signature to be notarized. Find out before you meet to sign, not after.

Keep copies of the signed title, the bill of sale, and your liability release confirmation. These protect you if a ticket or dispute shows up later.

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Answers come from our state paperwork data and published guides. Confirm anything binding with your state DMV.

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Selling vs. Gifting: What’s the Difference for Paperwork?

The paperwork process is nearly identical for both. The only real difference is what you write in the price field and whether your family member needs to file a gift exemption form with the DMV.

For sales, price the car at fair market value. Use Kelley Blue Book or Edmunds to get a number.

Pricing it too low doesn’t help your family member. A price below market value still gets taxed at market value. If you sell a $12,000 car for $500, the IRS may also count the $11,500 difference as a gift, which could create extra paperwork for you.

For gifts, write “$0” or “GIFT” on all paperwork. Where your state has a gift affidavit or exemption form, your family member brings it to the DMV to avoid the sales tax; the table below names it for every state.

Whether your relationship qualifies for the tax exemption is a separate question, and the answer depends on your state.

Transfer Type	Seller’s Tax Obligation	Buyer’s Tax Obligation	When It Makes Sense
Gift to a qualifying relative	File Form 709 if over $19,000 (usually no tax owed)	Often exempt from state sales tax	Helping family member, car under $19,000
Gift to someone outside the list	Same federal rules apply	Depends on the state. Exempt where the test is no consideration, taxable where it is a relationship list	Check your state before you rely on it
Sale at fair market value	None if selling at a loss	Sales tax on the higher of price or market value	Need the money, want a clear transaction
Sale below market value	Difference may count as a gift	Sales tax on market value, the higher of the two	Helping out but need some cash

Who Counts as Immediate Family?

States use one of three systems, and once you know which one yours uses, you know whether you qualify.

Relationship states publish a closed list. If you’re on it, the transfer is exempt, and in some of these states that holds even when money changes hands. If you’re not on it, the transfer is taxed as a sale.

Consideration states don’t ask who you are. The only test is whether anything of value passed. A genuine gift with no payment, no trade, no services and no loan taken over is exempt whoever receives it, including a friend or a neighbour.

Reduced-rate states publish a list but still charge. Texas takes a $10 gift tax, Illinois a flat $15, and Georgia a reduced title ad valorem rate. Being on the list saves you most of the bill, not all of it.

A few states run both at once. In those, a relative on the list is covered even in a low-price sale, while everyone else has to make it a true $0 gift to qualify.

Each entry below comes from that state’s own tax or motor vehicle source and updates when the state updates.

State	Who qualifies
Alabama	No one. Alabama has no list of qualifying relatives, and a private vehicle sale is taxed whoever the parties are
Alaska	Anyone at state level. Alaska has no state sales tax, though some boroughs and cities charge their own
Arizona	Anyone. Arizona has no family list, and a private transfer is not subject to sales tax
Arkansas	Anyone. The test is whether anything of value passed, not the relationship
California	Parent, grandparent, child, grandchild, spouse or registered domestic partner. Siblings only where both are minors. Stepchildren and ex-spouses do not qualify
Colorado	Anyone. The test is whether anything of value passed, not the relationship
Connecticut	Mother, father, sister, brother, son, daughter, husband, wife or civil union partner
Delaware	Spouse, parent, child, sibling and grandparent, including step-relations and in-laws. Delaware titles only
Florida	Anyone. The test is whether anything of value passed, not the relationship
Georgia	Spouse, parent, child, sibling, grandparent or grandchild. This is a reduced rate, not a full exemption. In-laws, step-relatives, aunts, uncles and cousins do not qualify
Hawaii	Anyone. A casual sale between private individuals and a genuine gift both fall outside the tax
Idaho	a parent or child, a grandparent or grandchild, or a brother or sister
Illinois	Spouse or civil union partner, parent, brother, sister or child. This is a flat $15 tax, not a full exemption. Step-relations, in-laws and grandparents do not qualify
Indiana	Spouse, child, parent, grandparent or sibling. A genuine gift is exempt separately whoever receives it. Step-relations, in-laws, aunts, uncles and cousins do not qualify
Iowa	Anyone. The test is whether anything of value passed, not the relationship
Kansas	Grandparent, parent, child, adopted child, stepchild, grandchild, and the spouses of any of these. Brothers, sisters, aunts, uncles, nieces and nephews do not qualify
Kentucky	Spouse, parent, child, stepparent, stepchild, grandparent or grandchild. Siblings and in-laws do not qualify
Louisiana	Anyone. The test is whether anything of value passed, not the relationship
Maine	Anyone. A true gift is not a sale, so the relationship does not matter
Maryland	Spouse, child, grandchild, parent, sister, brother, grandparent and several in-laws. An aunt or uncle aged 65 or over giving to a niece or nephew also qualifies
Massachusetts	Father, mother, brother, sister, husband, wife, son or daughter. Grandparents, cousins, aunts and uncles do not qualify
Michigan	Spouse, parent, child, sibling including half-siblings, grandparent, grandchild, step-relations, most in-laws, and a legal ward or guardian. Cousins, aunts, uncles, nieces and nephews do not qualify
Minnesota	Spouse, parent, child, grandparent or grandchild. Siblings, in-laws and step-relations do not qualify
Mississippi	Spouse, parent, child, grandparent, grandchild or sibling
Missouri	Anyone. The test is whether anything of value passed, not the relationship
Montana	Anyone. Montana has no general sales tax, so no relationship test applies
Nebraska	Anyone, provided the person giving the vehicle already paid tax on it. The test is whether anything of value passed
Nevada	Anyone. Nevada charges no sales tax on any private party transfer, gift or sale
New Hampshire	Anyone. New Hampshire has no general sales tax, so no relationship test applies
New Jersey	Anyone. The test is whether anything of value passed, not the relationship
New Mexico	Anyone. The test is whether anything of value passed, not the relationship
New York	Spouse, parent, child, stepparent or stepchild. Siblings, grandparents and in-laws do not qualify
North Carolina	Spouse, parent, child, stepparent or stepchild. Siblings, grandparents and in-laws do not qualify
North Dakota	Spouse, parent, child, grandparent, grandchild or sibling. A former spouse also qualifies within a year of a divorce decree
Ohio	Anyone. The test is whether anything of value passed, not the relationship
Oklahoma	Spouse, parent, stepparent, child or stepchild only. In-laws, grandparents and grandchildren do not qualify
Oregon	Anyone. Oregon charges no sales tax on a private transfer, so no relationship test applies
Pennsylvania	Anyone. The test is whether anything of value passed, not the relationship
Rhode Island	Anyone. Both family and non-family gifts are exempt, and the relationship only changes which paperwork is needed
South Carolina	Spouse, parent, child, sister, brother, grandparent or grandchild
South Dakota	Spouse, parent, child or sibling, and only where no money is exchanged. Grandparents, in-laws and step-relations do not qualify
Tennessee	Spouse, sibling, and lineal relatives up to great-grandparents and great-grandchildren, plus the spouses of children and grandchildren. It covers a sale as well as a gift
Texas	Spouse, parent, child, sibling, grandparent, great-grandparent and their in-law equivalents, plus a guardian. This is a $10 gift tax, not a full exemption. Aunts, uncles, nieces, nephews and cousins do not qualify
Utah	Utah has no sales tax exemption for a family-to-family vehicle purchase
Vermont	Spouse, parent, child, sibling, grandparent or grandchild. The vehicle must already be titled in Vermont in the giver's name
Virginia	Spouse, son, daughter or parent only, by birth or adoption. Stepparents, stepchildren, siblings, grandparents and in-laws do not qualify
Washington	Anyone, provided the previous owner paid Washington tax. The test is whether anything of value passed
West Virginia	Anyone. A transfer without consideration is exempt, and the relationship only changes which paperwork is needed
Wisconsin	spouse, ex-spouse with a divorce decree, parent, child including a child's spouse, mother-in-law or father-in-law, stepparent, stepchild, or a sole proprietor transferring from their own company to a family member.
Wyoming	No one. Wyoming has no family list, and a gifted vehicle is taxed on its market value

Three relationships cause most of the trouble, and none of them behaves consistently across states.

Siblings. Some states include brothers and sisters outright. Others leave them off entirely, and at least one only counts them when both are minors. An adult giving a car to an adult sibling is the single most common case where people assume they’re covered and aren’t.

Grandparents and grandchildren. Included in some lists, absent from others, and stretched as far as great-grandparents and great-grandchildren in Tennessee and Texas.

In-laws and step-relatives. People often assume they don’t count, and often they do. Several states name sons-in-law, daughters-in-law and parents-in-law on the form itself.

For any other state, check your own state guide or the list of state DMV websites. When the relationship is borderline, the safer route is a genuine $0 gift with nothing exchanged, which qualifies in more states than any relationship does.

How to Gift a Car?

Gifting follows the same steps as a sale, set out in full below. Four things change:

Check how your state decides. Either you’re on the relationship list, or your state only asks whether money changed hands. The table above says which.
Clear any loan first. You can’t gift a car with a lien on it. The lender has a claim on the title until the balance is paid and the lien release is recorded. Having the recipient take over the loan also counts as consideration, which turns the gift into a sale.
Mark the price field rather than leaving it blank. Write “$0” or “GIFT” on the title and the bill of sale. A blank price line is one of the most common reasons paperwork gets sent back.
Add your state’s gift form. Your family member takes it to the DMV with the title to claim the exemption. The table below names the form for each state.

Everything else is identical to any other title transfer. Same assignment section, same odometer disclosure, same release of liability on the day the car leaves.

Gift Forms and Deadlines by State

Two things change from state to state: the gift form your family member files to claim the tax exemption, and how long they have to register once the car is theirs.

Each row comes from that state’s own motor vehicle source and updates when the state updates.

State	Gift form to file	New owner must register within
Alabama	No separate gift transfer form. Alabama has no gift or family exemption for vehicles, and the county licensing official collects casual sales tax at registration	20 days from the date of sale
Alaska	No separate gift transfer form. Alaska levies no state sales tax on vehicles, so the transfer is recorded on the standard title application	30 days from the date of sale
Arizona	No separate gift transfer form. A private transfer sits outside transaction privilege tax, so the standard title and registration application is used	15 days from the date of sale
Arkansas	A gift affidavit signed by both the donor and the recipient, filed under Gross Receipts Rule GR-12. No state form number identified	60 days from the date of purchase
California	REG 256, Statement of Facts. CDTFA-106 is used where a use tax clearance certificate is required	10 days from the date of sale
Colorado	No separate gift transfer form. The transfer is recorded as a gift with no consideration at the county motor vehicle office	60 days from the date of sale
Connecticut	AU-463, Motor Vehicle and Vessel Gift Declaration, for a gift. H-13B carries the immediate family exemption code	none published; the car may not be driven on a public road until it is registered
Delaware	No separate gift transfer form. Delaware charges a vehicle document fee rather than sales tax, and it is waived for a qualifying family gift under 2 DE Admin. Code 2266	30 days from the date of purchase
Florida	No separate gift transfer form. The title is marked as a gift with no payment and no lien assumed	30 days from the date of sale
Georgia	MV-16, Affidavit to Certify Immediate Family Relationship	7 days from the date of sale
Hawaii	G-27, Motor Vehicle Use Tax Certification, with G-27A, the affidavit supporting a gift exemption	30 calendar days, or 60 days if the lienholder has no office in Hawaii
Idaho	ST-133GT, Gift Transfer Affidavit, for a gift. ST-133 for a sale between qualifying family members	30 days from transfer
Illinois	RUT-50, Private Party Vehicle Use Tax Transaction Return, filed with VSD 190. The flat tax is still paid	20 days from the date of sale
Indiana	ST-108E, Certificate of Gross Retail or Use Tax Exemption	45 days from the date of sale
Iowa	No separate gift transfer form. An affidavit claiming the exemption is filed with the county treasurer alongside the title and registration application	30 days from the date of sale
Kansas	TR-215, Affidavit of Relationship, for a qualifying family transfer. TR-12 carries the vehicle gift certification for anyone else	60 days from the date of sale, inclusive of weekends and holidays
Kentucky	71A245, Exempt Transfer Affidavit, for a qualifying family transfer. 71A101 is the multi-purpose usage tax form	15 days from the date of sale
Louisiana	DPSMV 1699, Act of Donation of a Movable	40 days from the date of purchase to avoid penalty and interest
Maine	No separate gift transfer form. The test is whether any consideration passed, and the exemption is claimed on the use tax certificate at registration	before the car is driven on a public way; Maine sets no grace period after a private sale
Maryland	VR-103, Application for Maryland Gift Certification	promptly after the vehicle is delivered, and within 30 days to avoid an added service fee
Massachusetts	MVU-26 for a transfer within the family list. MVU-24 for a gift to anyone else, which carries a $25 gift transfer fee	10 days from the date of sale
Michigan	No separate gift transfer form	15 days from the date of sale
Minnesota	No separate gift transfer form	20 calendar days from the date of sale
Mississippi	an Affidavit of Relationship, completed when the title is transferred at the county Tax Collector's office	30 business days from the purchase date to register the vehicle
Missouri	Form 768, General Affidavit, or a written gift statement, with GIFT entered in the sale price area of the title	30 days from the date of sale
Montana	No separate gift transfer form. Montana has no general sales tax, so the donor assigns the title and the recipient files the standard title application	40 days from the date of sale
Nebraska	Form 6, Nebraska Sales/Use Tax and Tire Fee Statement, with exemption 10 checked	30 days from the date of purchase
Nevada	No separate gift transfer form. Nevada charges no sales tax on private party sales, family sales or gifts	immediately on purchase; Nevada publishes no set number of days
New Hampshire	No separate gift transfer form. New Hampshire has no general sales tax, so a gifted vehicle uses the standard title assignment	no fixed number of days, since the registration expires when ownership transfers under RSA 261:66, I; a buyer who drives the car home first buys a 20-day temporary registration under RSA 261:57
New Jersey	No separate gift transfer form. GIFT is written on the purchase price line of the title to claim the exemption	10 working days
New Mexico	MVD-10018, Affidavit of Gift of Motor Vehicle or Boat, notarized	90 days from the date of transfer to apply for a certificate of title
New York	DTF-802, Statement of Transaction, Sale or Gift of Motor Vehicle	the buyer must register the vehicle before driving it on public roads, and within 180 days of the effective date on their New York State Insurance ID Card
North Carolina	MVR-613, the affidavit claiming exemption from highway use tax	28 days from the date of sale
North Dakota	No separate gift transfer form. The gift is indicated on the title and registration application, and the exemption is claimed at titling	30 days from the day the endorsed title is received to apply for a new certificate of title
Ohio	No separate gift transfer form. Ohio has no gift or family exemption code at all, so the transfer must genuinely involve no consideration	30 days from the date of sale
Oklahoma	Form 794, Family Affidavit	30 days to apply for the title transfer and 2 months from the sale date to complete full registration
Oregon	No separate gift transfer form. Oregon has no sales tax on a private transfer, so only the title and registration application is filed	30 days from the date of sale
Pennsylvania	MV-13ST, Affidavit of Gift, claimed as Exemption 13	20 days from the date of sale
Rhode Island	A gift letter, notarized where the recipient is not immediate family, together with the Affidavit of Gift of Motor Vehicle	Rhode Island sets no registration deadline, but the buyer's sales tax is due by the 20th of the month after the month of sale whether the vehicle is registered or not, and the vehicle needs a valid Rhode Island inspection sticker or a passing safety and emissions test within 5 days of registration
South Carolina	Form 400 (the person receiving the car checks the family-transfer box in the Infrastructure Maintenance Fee section)	45 days from the date of sale
South Dakota	No separate gift transfer form. The transfer must show no consideration, and the exemption is claimed at titling	45 days from the date of purchase
Tennessee	RV-F1301201, Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats	before the vehicle is driven on a highway; Tennessee publishes no set number of days (Tenn. Code Ann. 55-3-119)
Texas	Form 14-317, Affidavit of Motor Vehicle Gift Transfer, notarized	30 days from sale date (60 days for active-duty military)
Utah	No separate gift transfer form. Utah has no family or gift exemption to claim, so the price actually paid is reported on the title and bill of sale	there is no day count; the buyer applies for the title and registration before driving the car on a highway, and uses a temporary permit until they do
Vermont	No separate gift transfer form. The exemption is claimed on the VD-119 registration, tax and title application	the buyer must register before operating the vehicle on public roads
Virginia	SUT 3, Purchaser's Statement of Tax Exemption	30 days from the date of sale
Washington	No separate gift transfer form. The exemption depends on the previous owner having paid Washington tax and on no consideration passing	15 days from the date of sale
West Virginia	DMV-5-TR, Affidavit of Transfer of Ownership Without Consideration	no fixed deadline; the buyer may drive for up to 10 days on the previous owner's registration, with that owner's written consent, before titling and registering the car themselves
Wisconsin	No separate gift form; the person receiving the car picks "Gift" as the exemption reason in eMV Public, or uses form MV1 for an exemption eMV Public does not list	2 business days
Wyoming	No separate gift transfer form. Wyoming taxes a gifted vehicle rather than exempting it, so there is no exemption form to file	45 days from the date of sale for a private-party purchase

There is no gift form at all in 23 states, and most of them handle the exemption on the title application itself: Alabama, Alaska, Arizona, Colorado, Delaware, Florida, Iowa, Maine, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, South Dakota, Utah, Vermont, Washington, Wisconsin and Wyoming. Alabama, Utah and Wyoming have no gift exemption to claim. Where a form does exist, both of you usually sign it, and it goes in with the title paperwork rather than being filed separately.

Our list of all 50 state DMV websites has direct links if you want to download the form before you meet.

The Paperwork You’ll Need (Selling or Gifting)

Step 1: Get Your Title Ready

The title is your proof of ownership. Without it, you can’t legally transfer the car to anyone.

If you still owe money on the car, your lender holds the title. You’ll need to pay off the loan first, or work with the buyer and bank to handle the payoff at closing. Learn more in our guide on how to sell a financed car.

Lost your title? You can get a duplicate from your state DMV for a fee. Processing time varies widely by state, so start it before you set a handover date.

Step 2: Decide on Price (Sale vs. Gift)

This is where selling and gifting split.

If you’re selling: Look up your car’s value on Kelley Blue Book, Edmunds, or J.D. Power. Don’t lowball the price to save on taxes. The DMV bases tax on actual value regardless of what you write.

If you want to help them out financially, gift the car properly instead of inventing a fake low price. That’s the cleaner path, and in a consideration state it’s the only version that qualifies.

If you’re gifting: You’ll mark the price as “$0” or write “GIFT” on all paperwork. Many states have gift forms that prove it’s not a sale. On a larger transfer, KeySavvy can document the transaction securely so both of you have a clear record.

Step 3: Complete the Title Transfer

Find the section on the back of your title marked “Assignment of Title.” The title certificate must be properly signed by the registered owner.

Fill in your family member’s name and address, the sale price (or “$0” for gifts), the odometer reading (exact mileage, no rounding), and the date of sale.

If you are in a notary state, stop before you sign. The notary has to watch the signature happen, and a title signed in advance cannot be fixed without buying a duplicate.

Sign where it says “Seller’s Signature.” Your family member signs where it says “Buyer’s Signature.” Use black or blue ink only. Don’t make any corrections or cross anything out.

Step 4: Create a Bill of Sale

Even though it’s not required in every state, make one anyway. It protects both of you if questions come up later.

Your bill of sale should include both your names and addresses, the car’s year, make, model, and VIN, the odometer reading, the sale price (or “$0” for gifts), the date of sale, and both signatures.

Many states provide official templates you can download. Use your state’s form if they have one, or download a generic bill of sale template.

Step 5: Handle the Odometer Disclosure

Federal law requires a mileage disclosure at transfer for most vehicles from model year 2011 onward. Older cars, heavy trucks and trailers are generally exempt.

The odometer reading usually goes right on the title. Some states use a separate form. Either way, you need to record the exact mileage when you transfer ownership.

A gift is still a transfer, so the disclosure applies even when no money changes hands.

Step 6: File Your Liability Release Form

This is the most important form people forget about. It protects you from tickets, accidents, or anything else that happens with the car after you sell it or gift it.

Deadlines differ a lot. Three states want it immediately, sixteen set a date between 5 and 30 days, Maryland asks for it with no date attached, Kansas makes it optional, and sixteen have no filing at all.

File your release of liability form the day the car leaves either way. Some states call it a Notice of Transfer and Release of Liability, others a Notice of Sale, and our guide there has the deadline for each state.

About half the states take the filing online, and where they do it is a ten-minute job. You’ll need your license plate number, VIN, the recipient’s info, transfer date, and odometer reading. Save the confirmation receipt.

Get more details in our complete guide on what to do after selling.

A Note on Taxes

For 2026, the federal gift tax threshold is $19,000 per recipient. If your car is worth less than that, you don’t need to file any IRS paperwork. If it’s worth more, you’ll file IRS Form 709, but you still won’t owe any tax unless your total lifetime gifts run into the millions.

State tax is the separate question, and it’s the one that turns on who you are. Where the exemption runs off a relationship list, your family member claims it at the DMV when they register. If your last names are different, bring proof of the relationship, like a birth certificate or marriage certificate.

For sales, your family member pays state sales tax when they register. The DMV bases it on whichever is higher: the price you declared or the car’s market value.

What Your Family Member Needs to Do Next?

Once you’ve signed over the car, your work is mostly done. But your family member has several steps to complete.

Documents to Bring to the DMV

Your family member will need the signed title from you, the bill of sale (if required by your state), the gift form (if it’s a gift), proof of insurance, their driver’s license, the odometer disclosure (if separate from the title), and payment for fees and taxes.

Tell them to bring copies of everything, plus the originals. Some DMV offices want to keep certain documents.

Fees They’ll Pay

Transfer fees vary by state, but here’s what your family member should expect:

Fee Type	Typical Cost	Notes
Title transfer fee	$15 to $100	Varies by state
Registration fee	$50 to $200	Based on vehicle value or weight
Sales tax (if selling)	2% to about 7% of price at the state level, more with local taxes	May be waived on a qualifying gift
Plate fee	$5 to $50	If getting new plates
Inspection fee	$20 to $100	If required by state

Timeline for Registration

The clock starts on the date of sale written on the title, not the day they get round to the DMV. The spread is wider than people expect: 2 business days in Wisconsin, 7 in Georgia, 90 in New Mexico, and no fixed date at all in a handful of states. Each state’s deadline is in the table above.

The DMV will issue a temporary registration while they process the title transfer. The actual title usually arrives by mail some weeks later.

Insurance Requirements

Your family member needs insurance before they can register the car. Most states require proof of insurance at the DMV.

Tell them to get coverage before they drive the car home from your place. Driving without insurance can get the car impounded and result in hefty fines.

If they already have a policy on another car, they can usually add the new vehicle with a quick phone call to their insurance company.

Common Mistakes to Avoid

Assuming Your Relationship Qualifies

Brothers and sisters feel like immediate family in every other context, which is why this one catches people. Some states leave siblings off the list completely, and at least one counts them only when both are minors.

Grandparents and in-laws are excluded in some states and named on the form in others.

Check the table above before you plan around the exemption. A wrong assumption here costs whatever your state charges on the car’s book value.

Forgetting the Liability Release

This is the biggest mistake sellers make. Skip this form and you’re still on the hook for parking tickets, tolls, accidents, or even crimes involving the car.

Don’t wait for your family member to register the car. That could take weeks, and anything that happens during that time could come back to you.

Where your state files online, it takes ten minutes. Where it does not, it is a stamp or a counter visit, and still worth doing the same day.

Setting an Unrealistically Low Sale Price

Say your nephew offers $500 for a car worth $12,000. The DMV will tax him on the car’s actual value, not the price you wrote, and the IRS may count the $11,500 difference as a gift, which means tax paperwork for you.

The $1 sale is worse than useless in a consideration state, because that single dollar is the thing that turns a tax-free gift into a taxable sale. If you want to help your nephew out, gift the car properly with the right forms.

Skipping the Bill of Sale

Being family is no reason to skip the bill of sale. It records when the sale happened, the price you agreed and the car’s condition, so if your family member later tries to return the car or says you misrepresented it, you have proof. It takes about ten minutes to write.

Missing Transfer Deadlines

Your daughter lets the deadline pass without going to the DMV. Now she owes late fees, and in some states you can be on the hook for registration costs that built up while the car was still in your name.

Set a reminder on your phone to check in after a week or two. Make sure they’ve scheduled their DMV appointment and have all the documents they need.

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FAQ

What happens to my license plates when I transfer the car to family?

They do not go with the car, and a family transfer changes nothing about that. In 46 states the plates are yours and come off before the car leaves your driveway; only in Alaska, California, Hawaii and Minnesota do they have to stay with the vehicle, and in Oregon they can.

Leaving them on for a relative “just until they register” is the version of this that goes wrong: tickets and tolls follow the plate, and the plate is still registered to you.

Can I do the title transfer online without going to the DMV?

Rarely, and almost never the whole thing. Most states will let you file the seller’s side online, and some let the recipient start the title application online, but the signed paper title still has to reach the DMV and the fees and tax still have to be paid.

Where your state requires notarization, the in-person step is not avoidable at all: the notary has to watch the signature happen.

Do I need to be present when my family member goes to the DMV?

Usually not. Once you have signed the title and handed it over with the gift form, your part is finished and they can complete the transfer alone.

Texas is the exception worth knowing about: both the donor and the recipient sign the gift affidavit before a notary, and one of them has to appear in person at the county tax assessor-collector’s office. Check your own state’s gift process before you assume you can post the title and forget it.

Can I transfer a car to a family member in another state?

Yes, and the rule to remember is that your state governs your side and theirs governs theirs. You sign the title, meet any notary requirement your state has, and file your own release of liability. They register under their state’s rules, on their state’s deadline, and claim any exemption their state offers.

The trap is assuming the gift exemption travels. It does not: what matters is the rule where the car is being registered, not where it came from.

Can I give a car to someone who doesn’t have a driver’s license yet?

Yes. Ownership and the right to drive are separate things, and most states will title and register a car to someone who cannot legally drive it, including a minor in many states.

Insurance is the real obstacle. They need coverage before the car can be registered in most states, and an unlicensed owner usually has to name a licensed primary driver on the policy. Sort that out before the handover rather than after.

Article Update History

Updated March 17, 2026

The federal gift tax threshold and lifetime exemption now reflect the new tax legislation passed by Congress.

Published November 2, 2025

Originally posted and shared with our readers.

Cartoon man holding a family gift deed and a toy car wrapped with a red bow

Sources

Gift Transfer Tax Form

"Alabama has no separate gift transfer form" Accessed May 5, 2026

Buyer Registration Deadline After Sale

"20 days from the date of sale" Accessed Sep. 10, 2026

Release of Liability Filing Deadline

"Not required" Accessed May 5, 2026