Gifting a Car in Alabama
In Alabama gifting a vehicle follows the same process as a car sale between private parties.
Written by Ethan Moser
Reviewed by Kathleen Flear
Gifting a car in
Alabama
can help you avoid the hassle and fees of selling your vehicle in a private sale. However, you will still be subject to title transfer and registration fees, especially if you are financing the vehicle’s operation costs on behalf of the recipient. Giving someone a car as a gift is an incredibly generous gesture, though it is far more complicated than other (less involved) gifts. The process of gifting a car is especially complex because each US state has its own rules and regulations on how vehicle gifting has to be done.
Thankfully,
car insurance
comparison super app Jerry
has created a guide to gifting a car in Alabama to wipe away all the confusion. Jerry is here to provide you with a step-by-step to gifting a car, from mistakes to avoid, to what hidden fees to expect. Compare insurance quotes from 50+ carriers with Jerry in under 45 seconds (Title in payload)
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If you’re planning on gifting someone a brand new car, it’s best practice to bring them to the dealership with you. This will ensure that the recipient is getting a car that they love and one that they can afford to insure and maintain.
Remember, you won’t be able to gift a vehicle that you still owe money on. If you decide to purchase a new car for your giftee, you’ll need to make sure that you pay for it in full before you can initiate the title transfer process.
If your recipient is a teenage relative only just getting their license, making them part of the car buying process will make sure that they love their new car and help avoid any legal or financial issues later on.
Key Takeaway You’ll need the title in hand before you can give a car as a gift—so if you’re trying to gift a new car, you should strongly consider involving the giftee in the car buying process.
How to gift a used car in Alabama
In the case that you want to surprise your loved one with a new car via a grand driveway reveal, you’ll probably want to transfer a vehicle that you already own. The car doesn’t have to be old or run-down, especially if you’re able to buy a newer model outright. So long as the vehicle is completely paid off, no matter how new it is, you’re in the clear to gift it to another driver.
Regardless of how you’re planning on orchestrating your gift, you’ll have to follow the same process. Here’s what you’ll need to do if you want to legally gift a car in Alabama.
Negotiate the terms of the gift with your recipient
Whether you’re gifting to a friend or a family member, whether they are in on the gift or if they’re surprised, you’ll need to sit down with your giftee to talk about the car. Together you and your giftee will need to reach an agreement about who is going to be responsible for title transfer fees as well as the vehicle’s regular ownership costs.
You’ll want to be sure to determine who will be paying the transfer fee and things like car maintenance, insurance, and fuel costs associated with the gifted car. If your giftee can’t afford the costs of ownership, you may have to cover them.
Here’s a table of the costs you should discuss with your recipient.
Cost | Alabama average |
|---|---|
Title transfer | $15 |
Registration fee | $45 |
Insurance | $1,627 (liability only), $2,021 (full coverage) per year |
Maintenance | $1,186 per year |
Fuel | $2,649 per year |
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Record of the gift with a bill of sale
In Alabama, gifting a car follows the same general process as selling one between two private parties. Because of this, you will need to provide a notarized bill of sale for a gifted car, as well as a vehicle gift affidavit (
Form MV IRP-15
). Yes—even if there’s no money changing hands, an Alabama bill of sale acts as a legal record of your transaction. Having a copy in your record could protect you from legal consequences down the line. Both you and your recipient should sign the bill of sale, certifying that you agreed to the terms of the gift.
Transfer the vehicle title
Completing the title transfer for the gifted vehicle will actually make the vehicle the legal property of the giftee.
The vehicle recipient is responsible for completing the Alabama MVD vehicle title transfer form. You are responsible for completing all required information on the vehicle’s title certificate before completing the bill of sale.
In Alabama, any vehicle transfer is tax-exempt.
Once you and the recipient have completed all the necessary paperwork, you will need to visit your local Alabama county license plate issuing office to submit your paperwork and $15 title transfer fee.
Purchase Alabama liability insurance—or full coverage
Whether you are taking financial responsibility for insuring the gifted vehicle or helping your recipient find good insurance, it’s important that the car is covered with
a valid Alabama car insurance policy
. This is the last step in the gifting process—after this, your giftee is free to drive off into the Heart of Dixie in their new car! “Jerryquoted me a price that saved me almost $4000 a year in Alabama! I definitely recommend Jerry.” —Patricia B.
How to find affordable car insurance in Alabama
Finding the best insurance coverage without breaking the bank is going to help either you or your giftee take a big chunk out of the cost of owning their gifted car. Thankfully,
Jerry
makes it easy to find the best deals on insurance without sacrificing the coverage you need and want. Signing up with Jerry is easy: just download the app, fill in your information, and watch as multiple competitive quotes roll in from some of the country’s top insurance providers—and in less than 45 seconds!
Jerry makes insuring your gifted car a breeze by taking away the hassle of shopping around for insurance quotes. In addition to saving you time, Jerry also saves its users an average of $887 a year on their car insurance policies.
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Do you have to pay taxes on a gifted car in Alabama?
No! Under Alabama law, you’re not required to pay use tax on a vehicle you receive as a gift.
Is it better to gift a car or sell it for $1 in Alabama?
The MVD has a gift process for a reason—it’s the most legitimate way to transfer a car as a gift in Alabama and the safest bet if you’re not planning to sell the car for a fair market price.
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