Planning to gift a car to a family member? It is one of the most common ways vehicles change hands – and one of the most common places the paperwork goes wrong.
This guide walks through the title transfer, the gift affidavit, notarization and the tax rules, so the gift is accepted the first time.
Can You Gift a Car?
Yes. Every US state allows vehicles to be transferred as gifts, and most exempt genuine family gifts from sales tax.
The key word is genuine: the transfer must be free, with nothing given in return, and the paperwork must say so.
That is exactly what the gift affidavit documents.
Step by Step: Gifting a Car
First, the donor signs over the title to the recipient, writing “gift” where the sale price is requested if the state’s title has such a field.
Second, complete your state’s gift form or a general affidavit of gift, and have it notarized where required.
Third, the recipient registers the vehicle, presents the gift paperwork, and arranges insurance before driving.
The Gift Affidavit
The affidavit of gift is the donor’s sworn statement that the vehicle was given freely – it identifies the car by make, model, year and VIN, and names both parties and their relationship.
Motor vehicle agencies use it to apply the family gift tax exemption, which is why most of them require the signature to be notarized.
With NotaryPublic24 the donor can create and notarize the affidavit online within 24 hours.
State Forms to Know
Several states have their own mandatory gift forms: Texas uses Form 14-317 (Affidavit of Motor Vehicle Gift Transfer), Massachusetts uses MVU-26, and Pennsylvania uses MV-13ST.
If your state prescribes a form, use it – the general affidavit covers states without one and private situations such as insurance or estate documentation.
Check your state DMV’s requirements before the recipient books their registration visit.
Taxes When Gifting a Car
Most states exempt genuine gifts between close family members from sales or use tax – the gift affidavit is what proves the exemption applies.
Federal gift tax can apply to high-value vehicles, but only above the annual exclusion; thresholds change, so check current IRS limits.
Selling the car for one dollar instead of gifting it is usually a mistake: several states then tax the vehicle’s full market value.
Checklist for the Recipient
Before driving: the signed-over title, the gift affidavit or state form, and active insurance in your own name.
At registration: identification, the gift paperwork, registration fees – and for newer vehicles, an odometer disclosure at transfer.
After registration: new plates where required, and updated insurance documents showing you as owner.
Who Counts as Family?
The tax exemption usually covers close family – spouse, parents, children, siblings and often grandparents – but every state draws the line differently.
Cousins, in-laws and unmarried partners fall outside the exemption in several states, so check your state’s eligible-relative list before assuming the gift is tax-free.
Gifting Across State Lines
The recipient registers the car in their own state, and that state’s gift rules apply – not the donor’s.
Out-of-state vehicles often need a VIN inspection at first registration, so the recipient should check that requirement before their DMV visit.
Frequently Asked Questions
Is it better to gift a car or sell it for $1?
In most states, gifting is better. A genuine family gift is often tax-exempt, while a $1 sale can be taxed on the car’s full market value. Check your own state’s rules before choosing.
Does a car gift affidavit need to be notarized?
In most states, yes – the motor vehicle agency wants the donor’s identity verified and the signature witnessed before applying the tax exemption.
Can I gift a car to a non-family member?
Yes, but the tax exemption often only covers close family. Gifts to friends or others may be taxed as ordinary transfers – the affidavit still documents that no payment changed hands.
What is Form 14-317?
Texas’s Affidavit of Motor Vehicle Gift Transfer – the mandatory form for vehicle gifts in Texas, filed with the title application at the county tax office.
What documents does the recipient need to register a gifted car?
Typically the signed-over title, the gift affidavit or state gift form, proof of insurance and identification. Some states add an odometer disclosure for newer vehicles.