If you're wondering how to transfer a car title to a family member, the process can be a bit convoluted. The steps you need to follow will vary depending on whether there's a bill of sale and money involved or if you're gifting the car to your relative for free. We'll take you through both scenarios in this guide.
Why is it Important to Transfer a Title?
A car title is a document that proves ownership of the vehicle. It also allows law enforcement to determine who is liable if the car is involved in a crime or gets into an accident. Even if you want to give your car to a family member for free, it's important that they get the title into their name ASAP. Allowing someone else to drive your car while the title is in your name will cause complexities with insurance, registration costs, and legal liability. Ideally, you always transfer a title into the new driver's name before they take possession of the vehicle. You'll find the steps you need to follow below.
How to Transfer a Car Title to a Family Member
If you're selling your car to a family member, the process of transferring the title is very straightforward. But, if you're gifting the automobile, you may need a different form. You also need to make sure that your relative has their documents in order before going to the DMV.
Advice Before You Transfer a Title
In many cases, people sell or gift a car to their family because their relative just got a license. Especially in cases like this, it's essential to remember this advice:
- Your relative is required to have their license if they wish to get the car in their name. If they don't have a valid license, or lose it, they need to get a replacement first.
- The DMV will likely ask for proof of insurance before they'll transfer the title to the new owner. Make sure your relative purchases a policy before going to the DMV.
- You remain legally liable for the car until the title is transferred, so it's crucial that you don't allow your relative to start driving the vehicle until they're ready to place it in their name. With this advice out of the way, let's dive into the details of transferring the title.
Selling Your Car to a Family Member
To sell your car to a family member is no different than selling your car to anyone else. That means you need to follow these steps:
- Assign a fair market price to the vehicle. Setting the price too low may be seen as an attempt to avoid sales tax.
- Use one of our Bill of Sale templates for your state. Make sure all information is accurate, including the odometer reading.
- Find your car's title. If more than one owner is listed on the title, most states will require both to sign along with the buyer.
- Check your plates. In most states, the plates belong to you, so you should take them off the car before selling it.
- Have your family member take the car, bill of sale, and signed title to the DMV so that the official transfer can take place.
- The DMV will ask them to pay sales tax on the vehicle, along with a fee to cover the cost of new plates and registration. This process is quite straightforward, but it can become more complicated if your vehicle has a loan. If your car still has a loan, see this advice on selling your finance vehicle.
Gifting Your Car to a Family Member
If you want to give your car to a family member for free, they'll still need to go to the DMV to get the title transferred and purchase new plates and registration. The steps to get there are as follows:
- Find the form. Some states have a "Gift Transfer Affidavit," while others (like Florida) allow you to use a Bill of Sale with a $0 sales price.
- Determine the tax obligations. Depending on your state, the buyer may be exempt from sales tax, or they may need to pay tax on the assessed fair market value of the vehicle.
- Locate your car's title. As in selling your vehicle, both the owner and buyer will need to sign the title and fill out the odometer disclosure.
- Have your family member take the form and title to the DMV. There may be a small title transfer fee in addition to the cost of license plates and registration. In general, it's not too difficult to learn how to transfer a car title to a family member. While we'd love to give you more details on what's required by your state, every locale has varying laws when it comes to forms and tax exemptions.
Learn More With PrivateAuto
If you're looking for more detailed advice, PrivateAuto has buying and selling guides for every state, along with tools to make the process safer, simpler, and more secure.