Gifting a car is incredibly generous and can make a huge difference in someone’s life. But it’s more complicated than buying a different sort of gift, like jewelry or a video game. Every state has different regulations surrounding gifted cars.

If you want the process of giving a car as a gift to go smoothly, the

car insurance

comparison app

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is here to help. In this article, learn how to gift a car, what mistakes to avoid, and which taxes and fees (if any) you’ll have to pay.

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How to buy a car as a gift in Utah

To gift a new car, here’s how to make it easy: bring the intended recipient to the dealership so they can participate in the shopping and financing.

You can’t gift a car if it has a

lien

on it. You need to hold the title yourself to transfer it. So essentially, you would have to pay for a new car outright in order to

transfer the title

to the gift recipient.

If you’re gifting a new car to someone and can’t afford to buy it without a loan, include them in the

car-buying process

. You could do this by cosigning for a loan and agreeing to pay it off for the giftee. That way, their name can be on all the paperwork, too (title, registration, etc.).

Key Takeaway Involving the giftee in the buying process makes sure the recipient gets their dream car while avoiding unpleasant legal and financial situations.

MORE:

How to buy a new car

How to gift a used car in Utah

If you’d rather the vehicle be a surprise, you can easily transfer the title of any vehicle you own outright to the gift recipient. Because cars depreciate so quickly, paying in full to buy a couple-year-old model as a gift is more attainable for many people than paying in cash to buy something brand new.

Or maybe you’re planning to gift your current vehicle because you’re ready to get a new car for yourself. So long as it’s paid off, giving away your current car should be a breeze, too.

New car or old, surprise or not, you’ll want to follow the steps outlined below to ensure the gifting process goes well.

Negotiate the terms of the gift with your recipient

Through the excitement and hubbub of the recipient learning they’re receiving a new vehicle, remember that this process does involve some costs. Transferring a title typically comes with fees, and there are regular costs associated with car ownership.

The fees in Utah are the general title fee and the change of name title fee. Both are $6, for a combined total of $12. You’ll also need an emissions test, which can range from $25 to $30.

You’ll need to decide who’s going to pay said fees, as well as who’s going to be responsible for car maintenance, insurance, gas, and other ongoing vehicle expenses. It would be terrible to gift someone an unexpected financial burden—it’s better to talk all this through beforehand.

Record of the gift with a bill of sale

Is a bill of sale really necessary for a gift? No, not in Utah—but the state does recommend completing a

bill of sale

, even for gifts.

Why? This proves the seller/gifter has legally transferred ownership to the recipient and could spare you from legal consequences down the road.

To cover all your bases, write “GIFT/$0” under the purchase price on the bill of sale. That way, sales tax should not apply.

Transfer the vehicle title

Next, transfer the title to the recipient so they can legally hold the car. This step is what officially gives ownership to the lucky person you’re gifting.

To transfer the title, you will need to:

Complete the back of the title

Sign the title over to the gift recipient

Give the recipient a current emissions certificate

Give an

Odometer Disclosure Statement

if the car is 9 years old or younger

Provide the recipient the current

registration

Remove the license plates (these do not transfer)

Notify the DMV of the sale/gift

To notify the DMV of the “sale” (i.e., gift), you will need to send a letter including the full description of the vehicle to: Division of Motor Vehicles, Suspended Transaction Unit, PO Box 30412, Salt Lake City, Utah 84130.

Once all that tedious paperwork is finished, you can bring it to the DMV office to register the vehicle in the recipient’s name.

Purchase Utah liability insurance—or full coverage

The last, and perhaps most important step, of gifting a vehicle is making sure the car is covered with car insurance that meets

Utah’s minimum requirements

. Without insurance, the gift recipient won’t be able to drive the car!

Either you or the giftee will need to secure liability coverage. But if possible, it’s better to carry

full coverage car insurance

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How to find affordable car insurance in Utah

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