can help you avoid the hassle and fees of selling your vehicle in a private sale. Gifting a car does come with some fees, however, including title transfer and registration fees.

Sometimes it’s hard to find your loved ones the perfect gift, but you really can’t go wrong with giving someone a brand-new car! While this generous gift might be more involved than your typical present, it will certainly leave both you and the recipient feeling warm and fuzzy for a long time to come. The process of gifting a car can be complicated, however—especially since each US state has its own set of rules and regulations about how and when you can pass your vehicle on to someone else.

No need to worry, though, because

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How to buy a car as a gift in Arkansas

When it comes to gifting a car, you have two options from the start; you can either gift a car that you already own or purchase your giftee a brand-new vehicle straight off the lot. If you’re opting for the latter choice, we suggest bringing the recipient of the vehicle with you to the dealership. While this might dash any hopes of a grand driveway surprise, it will ensure that the giftee is getting a car that suits their wants and needs as a driver.

It’s important that you understand that when you’re shopping new for a vehicle you plan to gift straightaway, you’ll have to pay for the car in full before you can begin the gifting process. This is because a vehicle’s title can only be transferred to another owner if

there are no liens on the car

. You’ll either have to finance the car in full upfront at the time of purchase, or you’ll have to apply for a lien release.

A lien release, once approved by your lienholder, will make any remaining debts on your vehicle the financial responsibility of the recipient. Your recipient will also need to agree to these terms and conditions if you can’t completely finance the vehicle. Make sure that you pay for it in full before you initiate the title transfer process.

If your recipient is a teenage relative who’s only just getting their license, making them part of the car buying process will not only make sure that they love their new car, but also help to 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.

MORE:

How to buy a new car

How to gift a used car in Arkansas

If you just can’t pass up the opportunity to surprise your giftee with a new car in the driveway, you’re better off transferring a vehicle that you already own. This doesn’t mean that the model needs to be old. On the contrary, you can still gift a relatively young used model, so long as you have it completely paid off.

Regardless of whether you choose to gift a new or a used vehicle, the process is the same. Here’s what you’ll need to do if you want to legally gift a car in Arkansas.

Negotiate the terms of the gift with your recipient

After the excitement of the gift dies down a little, it’s important that you sit down with your giftee to discuss who will be responsible for what when it comes to the car. Whether this person is a friend or a family member, the two of you will need to work out who is going to be financially responsible for not only the fees associated with transferring the car’s title, but also for regular costs of ownership like insurance, maintenance, and fuel costs. If your giftee can’t afford the costs of ownership, you may have to cover them.

Arkansas

, a title transfer requires a $10 transfer fee.

Here’s a table of the costs you should discuss with your recipient.

Cost	Arkansas average
Title transfer	$10
Registration fee	$17
Insurance	$1,741 (liability only), $2,450 (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 Arkansas, you’ll be required to fill out a bill of sale even though there is no actual money being exchanged between you and your giftee. An Arkansas bill of sale requires both you and the recipient to sign to certify that you have agreed to the terms of the exchange. This will protect you in the unlikely event of future legal complications associated with the gift.

Arkansas bill of sale

is located on the same form as your odometer disclosure statement (

Form 10-313)

, which will be required for gifted cars that are less than 20 years old.

Transfer the vehicle title

Completing the title transfer for the gifted vehicle will make the vehicle the legal property of the giftee.

In addition to completing the title transfer form with the Arkansas OMV, the recipient of the gift will need to gather the following documents before moving forward:

Completed Official Release of Lien or Permission to Issue a Replacement Title (Form 10-315)

The vehicle’s title

An odometer disclosure statement (Form 10-313)

A bill of sale (Form 10-313)

Completed Vehicle Registration Application

$10 title transfer fee

Once they have all the necessary documentation, the recipient will need to visit their local Arkansas State Revenue office to complete the title transfer process.

In Arkansas, any vehicle transfer is tax-exempt.

Purchase Arkansas liability insurance—or full coverage

Whether it’s for you or your giftee, having

a valid Arkansas car insurance policy

is not only important for protecting you and your vehicle, but it’s also a legal necessity. Once your recipient has completed the title transfer process, they’ll need to add the vehicle to their insurance policy as soon as possible. This is the last step in the gifting process—after this, your giftee is free to drive off into the Land of Opportunity in their new car!

MORE:

Top auto insurance providers in Arkansas

How to find affordable car insurance in Arkansas

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Do you have to pay taxes on a gifted car in Arkansas?

No! Under Arkansas 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 Arkansas?

The Arkansas OMV has a car gifting process in place for a reason—it’s the most legitimate way to transfer a car as a gift in Arkansas, and the safest bet if you’re not planning to sell the car for a fair market price.

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