Gifting a Car in California
As long as you’ve got the vehicle title, you can gift a car in California by filling out the title and completing a Statement of Facts.
Written by R.E. Fulton
Reviewed by Kathleen Flear
Gifting a car in California can help you waive taxes and fees associated with a private vehicle sale—but you’ll still need to pay title transfer and registration fees and fill out a Statement of Facts to certify that it’s a gift.
A car is one of the most generous gifts you can give someone, and it’s got a ton of feel-good power. But it’s a lot more complicated than going to the store and picking out a nice sweater or the latest phone, especially since every state uses a different set of regulations for vehicle gifts.
To help your big car gift go off without a hitch, car insurance comparison super app
Jerry
has created a guide to gifting a car in California. Here’s what you need to know about car gifts: how to do it, mistakes to avoid, the fees you’ll skip by gifting instead of selling, and—of course—how to lower your California car insurance costs
. How to buy a car as a gift in California
The simplest way to give a new car as a gift is to bring the recipient with you to the dealership so that they can be involved in the shopping and financing process.
That’s because the only way to give a car as a gift is if there are
no liens
on the vehicle. You’ll need to pay off any loans in order to transfer the title. If you want to gift a new car to a family member who just got their license but can’t afford to buy a new car outright without a loan, make them a part of the car buying process. This ensures that your recipient gets the car they want while avoiding any legal and financial snafus.
How to gift a used car in California
If you’re set on the big driveway reveal, the best way to gift a car is to transfer a vehicle you already own to your new recipient. It doesn’t have to be an ancient model—if you’re able to buy a recent model outright, or if you’ve paid off your loan on an existing vehicle, you’ll be set to make it a gift.
If your gift is more about helping out a loved one and offloading a car you’re not using than creating a big moment, you’ll need to follow the same steps. Here’s what you’ll need to do to legally gift a car in California.
Negotiate the terms of the gift with your recipient
Once the excitement dies down, sit down with your intended recipient to reach an agreement about the gift. Even as a gift, a title transfer involves fees, and car ownership comes with regular costs.
In
California
, a title transfer requires two fees: a $15 transfer fee and a $8 smog transfer fee, for a combined total of $23. You can use the DMV’s fee calculator
to estimate any other possible fees associated with the vehicle gift. Discuss who’s going to pay for the title transfer as well as for car maintenance, insurance, fuel, and any other expenses associated with the car. You don’t want to give the gift of an unexpected financial burden along with the car.
Here’s a table of the costs you should discuss with your recipient.
Cost | California average |
|---|---|
Title transfer | $23 |
Registration fee | $64 |
Insurance | $1,869 (liability only)
$2,344 (full coverage) per year |
Maintenance | $1,186 per year |
Fuel | $1,500-$2,000 per year |
Record of the gift with a bill of sale
What, a bill of sale for a gift? Yes—even if there’s no money changing hands, a California 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
The most essential step in the car gifting process is the title transfer. That’s what officially transfers ownership of the car to your giftee.
You and your recipient should fill out and sign the vehicle title, or an
Application for Replacement or Transfer of Title (REG-227)
if you don’t have the original. Be sure to indicate in the appropriate box that the car is being transferred as a gift. You’ll also need to fill out a
Statement of Facts (REG-256)
for tax exemption. In California, any vehicle transfer between family members (parents, children, grandparents, grandchildren, spouses, domestic partners, and minor siblings) is tax-exempt. Once you’ve finished all the title paperwork, bring it along with your
fees
to the nearest DMV office. You’ll be able to register the car there. It’s important to complete the title transfer and registration process within 10 days of the gift. Purchase California liability insurance—or full coverage
Whether you’re footing the bill or leaving it up to your recipient, make sure that the gifted car is covered with
a valid California car insurance policy
. This is the last step in the gifting process—after this, your giftee is free to drive off into the Hollywood sunset in their new car! “Jerryquoted me a price that saved me almost $4000 a year in California! I definitely recommend Jerry.” —Patricia B.
How to find affordable car insurance in California
Whether you’re adding an insurance policy to your gift bundle or just trying to save money on your own coverage, Jerry can help any car owner in California find the lowest available rate on car insurance.
Unlike gifting a car, the Jerry process is simple: just download the app, answer a few simple questions, and you’ll get customized quotes from 50+ top companies in 45 seconds or less.
Jerry wants to give you the gift of a hassle-free insurance shopping process. That’s why we’ll never send you spam or sell your information, and we won’t call you unless you ask us to. And the bright red bow on top of that peace and quiet? $887 a year in average user savings.
Let Jerry find your price in only 45 seconds
No spam · No long forms · No fees
Do you have to pay taxes on a gifted car in California?
No! Under California 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 California?
The DMV has a gift process for a reason—it’s the most legitimate way to transfer a car as a gift in California, and the safest bet if you’re not planning to sell the car for a fair market price.
Reduce your monthly car payments in minutes?
Find out if Jerry can reduce your payments by an average of $150/month
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