Gifting a Car in Colorado
You can gift a car in Colorado by transferring the title and registering it at your local DMV. You don’t pay sales tax if you gift the car to a family member.
Written by Katherine Duffy
Reviewed by Kathleen Flear
Gifting a car in
Colorado
may help you avoid expenses that come with private car sales, like sales tax. You’ll still need to transfer the car’s title and properly register the car as a gift, though.Giving a car to someone as a gift is a huge display of generosity. Maybe your child just got their driver’s license or your spouse got a promotion that includes commuting more frequently. Whatever the reason, gifting a car to someone is a bit more complicated than gifting chocolates or jewelry. Each state uses different regulations for gifting a car, so it’s important to get it right.
That’s why
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super app Jerry
has created a complete guide on how to gift a car in Colorado. Read more to learn about how to buy a car as a gift, how to gift a used car, and an overlooked part of the car gifting process—how to find affordable car insurance!RECOMMENDED
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How to buy a car as a gift in Colorado
If you’re planning on buying a brand new car to gift someone, you may want to skip the big driveway reveal. The best way to gift someone a new car is to bring them with you to the dealership and include them in the purchase process.
This is because the gift recipient won’t receive the car title until all car loans are paid and
liens
are removed. If you’re not in possession of the car’s title, your gift recipient will need to take over the loan. This isn’t an issue if you can pay for the car outright—but if you’re financing, you’ll want to include the recipient in this process to work out a payment plan and avoid any legal or financial troubles down the road.
Brand new cars are a huge financial investment, so including the gift recipient also ensures they’re getting exactly what they want.
Key Takeaway You can’t gift a car to someone without the title in hand. To avoid financial complications, bring the giftee with you to the dealership.
How to gift a used car in Colorado
If you’d like to wow your giftee with a surprise new car, the best way to do it is to gift a car you already own. This could be a new or used car you’ve bought in full up-front, or even a car you’ve owned for a while and would like to give to a loved one.
Whether the gifted is a surprise or not, you’ll have to follow the same process as transferring a vehicle title to a family member to properly gift a car in Colorado.
Here are the steps you’ll need to take.
Negotiate the terms of the gift with your recipient
As gifting a car is more complicated than gifting items like clothing or useful appliances, you’ll need to negotiate the terms of the gifted car with your giftee once the excitement dies down.
Even though the car is a gift, you’ll still need to pay the title transfer fee of $7.20, the registration fees (which start at $45), the emissions testing fee, insurance fees, regular servicing fees, and paying for gas.
You don’t want to give the gift of an unexpected financial burden along with the vehicle! Here are some of the costs you should discuss with your recipient:
Cost | Colorado average |
|---|---|
Title transfer | $7.20 |
Registration fee | $45-$90+ |
Insurance | $1,633 (liability only), $2,308 (full coverage) per year |
Maintenance | $1,186 per year |
Fuel | $1,837 per year |
Record of the gift with a bill of sale
You may wonder why you should record the gift with a bill of sale. The car is a gift, after all—so why go through this step?
Creating
a bill of sale
for your gift acts as proof that ownership has been transferred to giftee and that you’re no longer responsible for the car. 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 giftee has 60 days to register their vehicle at the DMV. You’ll need to endorse the title so that they can complete this process. Here’s what you need to do:
- Make sure you have the original title: You’ll need your original title or a certified duplicate of your title to begin the title transfer process in Colorado.
- Odometer reading: You’ll need to record the car’s odometer reading in the Odometer Reading box on thetitle application formif the car is less than 20 years old.
- Your printed name and signature: You’ll have to clearly print your name exactly as it appears on your current title and sign in the Seller’s Signature box.
- The giftee’s printed name: The giftee must print their name exactly as they’d like it to appear on their new title. If you had to report the odometer reading, the giftee must also sign acknowledging they’re aware of the reading.
- Date of sale and purchase price: Fill out the date in the appropriate box and write “gift” in the purchase price box to transfer your vehicle title as a gift.
- Existing loans: If there are any loans on the vehicle, the lender will have to sign off on the title application form. The loan will be transferred to the giftee if the title application is successful.
Once you’ve endorsed the title using the title application form, you’re ready to head to your local DMV and register the gifted vehicle. Here’s a complete checklist of what you’ll need:
- New owner identification or designated power of attorney: Use this list of acceptable secure and verifiable forms of IDto determine which ID to bring to register the car in Colorado.
- Vehicle title and title application form: You’ll have to present the current title and prove you’ve endorsed the title with the title application form.
- Emissions test: You’ll have to put the gifted car through an emissions test and present the test results at the DMV if your county requires one.
- Odometer reading: You’ll have to present a current and accurate odometer reading when registering the car if it’s less than 10 years old.
- Insurance coverage: You’ll need to show proof that the car is currently insured with an insurance card and a copy of your current policy.
- Vehicle identification number (VIN) verification: If the car is from out of state, you must complete a VIN verification using aVerification of Vehicle Identification Number form.
- License plates: Colorado State Law requires you to keep your own plates, so your giftee will need new ones. The giftee can obtaina temporary taguntil they have new plates.
After you’ve presented all of the above documents to your local DMV office, it’s time to pay fees associated with title transfer and registration. You’re exempt from sales tax if the giftee is an immediate family member and the car was gifted freely. If there is a loan on the vehicle, though, you’ll be subject to tax.
Key Takeaway Once you’ve endorsed the car title, bring the required documents to your local Colorado DMV to transfer the title and register the car under the giftee. You’ll be exempt from sales tax if you gift the car to an immediate family member.
Purchase Colorado liability insurance—or full coverage
Whether you or the giftee is responsible for purchasing insurance for the gifted car, it must be covered by a valid insurance policy that meets the
minimum car insurance requirements in Colorado
. How to find affordable car insurance in Colorado
Whether you’re shopping for an insurance policy for your giftee or trying to save on your own insurance, Jerry does all the hard work of finding cheap quotes from the top insurance companies and finalizing your new car insurance. Jerry will even help you cancel your old policy.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.
While you’re gifting a car, Jerry’s gift to you is an average of $887 per year in user savings.
“BeforeJerryI was paying $280 for basic full coverage. Jerry found me a Progressive plan for $117 that includes better coverage. This was even better than previous quotes I’d received!” —Faith M.
Do you have to pay tax on a gifted car in Colorado?
If you’re gifting a car to an immediate family member in Colorado, you’ll generally be exempt from paying tax on the gifted car. You may have to pay taxes if the giftee isn’t immediate family.
Is it better to gift a car or to sell it for $1 in Colorado?
The Colorado DMV has a gift process for a reason. Following this process is the best way to transfer a car as a gift rather than selling it for a fair market price.
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