Gifting a Car in Michigan
To gift a car in Michigan, you’ll need to fill out the forms for a title transfer, then visit the Secretary of State’s office with your giftee.
Written by Macy Fouse
Reviewed by Kathleen Flear
Gifting a car in
Michigan
may help you avoid taxes and fees that come along with a private vehicle sale, but you’ll still have to pay the title transfer and registration fees as well as complete all the necessary documents.Gifting a car to someone is one of the most generous things you can do, and the recipient is sure to be thankful to you for eternity. On the downside, the process of gifting a car is more complicated than simply picking out a regular gift and handing it over. Plus, each state has different rules and processes about gifting cars.
To make your gift-giving process as easy as possible,
car insurance
comparison super app Jerry
has compiled a handy guide to gifting a car in Michigan. We’ll answer all your questions, including how to buy a car gift, what to avoid, and the fees you can avoid by gifting rather than selling.RECOMMENDED
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How to buy a car as a gift in Michigan
To gift someone a new car, your best bet is to just take them to the dealership with you. This ensures the recipient is involved in the shopping and financing process. Plus, the dealership will typically handle the titling.
You can only give a car as a gift if it does not have a
lien
. To gift a car with a lien, you first have to pay off any loans so you can transfer the title. If you want to give a car to a new driver in the family who can’t buy a new car without a loan, it’s wisest to include them in the
car-buying process
.
This ensures your recipient will get their choice car while you both avoid any possible legal or financial complications.
Key Takeaway To give a car as a gift, you must have the title without a lien. That’s why it’s a good idea to bring the recipient to the dealership with you.
How to gift a used car in Michigan
If you’re looking for the big driveway gift reveal with the shiny red bow, your best option will be to transfer a car you already own to your giftee. If you’re able to buy a newer model upfront, or if you’ve paid off the loan for a car, you can give it as a gift.
If your goal is to help a family member by giving them a car you have on hand, you’ll have to follow the same process. Here’s how to legally gift a car in Michigan.
Negotiate the terms of the gift with your recipient
When the excitement winds down, you and your giftee will need to sit down and determine the logistical details of the car. After all, a title transfer comes with fees and paperwork, and car ownership comes with its own regular costs—even if the vehicle is a gift.
In
Michigan
, a title transfer requires a $15 fee, but you may be required to pay additional fees depending on your situation. It’s a good idea for both the gifter and giftee to go to your local Secretary of State (SOS) branch so you can avoid any mix-ups. The gifter and recipient will also have to decide who will pay for the title transfer. Additional expenses you’ll also need to discuss are car maintenance, insurance, fuel, and any additional costs associated with the car. You don’t want to gift a vehicle if the recipient isn’t ready to take on a financial burden along with it.
Here’s a table of the costs you should discuss with your recipient:
Cost | Michigan average |
|---|---|
Title transfer | $15 |
Insurance | $2,164 (liability only)
$2,131 (full coverage) per year |
Maintenance | $1,186 per year |
Fuel | $1,500-$2,000 per year |
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Transfer the vehicle title
The most important element of the car gifting process is
transferring the title
, which legally transfers ownership from you to your recipient. In Michigan, this will take place at a Secretary of State office.Here’s how the process will go:
- First, you’ll complete the title assignment. This will include filling out the form, noting the odometer reading, and signing the document.
- You’ll be required to show proof of lien release, if necessary.
- You may also wish to transfer the license plate, so bring that to your appointment as well.
- If your recipient cannot be present at the SOS office for the title transfer, you’ll also need to fill out anAppointment of Agent form(Form TR-128).
- Finally, you’ll have to pay all applicable fees.
After you’ve completed all necessary steps, you should receive your new title in the mail within 14 days.
Purchase Michigan liability insurance—or full coverage
To register the vehicle, you’ll have to show proof of a
valid Michigan insurance policy
. This is the final step in the car-gifting process. When you’re done, your giftee is free to speed away in their new ride!How to find affordable car insurance in Michigan
Whether you plan to cover your giftee’s car insurance or you’re looking to save some dough on your own policy,
Jerry
can find the lowest possible rate on coverage for any Michigan driver. Jerry’s process is much simpler than gifting a car—all you have to do is download the app, answer some quick questions, and see all your best options in 45 seconds or less!
As a licensed broker, Jerry can even sign you up for a new policy or help you switch. If you need help or have questions along the way, Jerry’s agents are just a text away—we’ll never call unless you ask us to! The cherry on top? The average Jerry user saves $887 a year on insurance.
“Jerrymade switching over to new insurance so quick and easy! My monthly payment went from $469 to $362 by switching me to Progressive. 10/10 would recommend!” —Luanne T.
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Do you have to pay taxes on a gifted car in Michigan?
It depends. In Michigan, you won’t have to pay any sales or use tax on a gifted car if you’re a family member, including spouses, parents, step-parents, in-laws, siblings, children, grandparents, and grandchildren.
Is it better to gift a car or sell it for $1 in Michigan?
The SOS has a gift process for good reason—it’s the most legitimate way to transfer a car as a gift in Michigan, so it’s probably your safest option.
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