Gifting a Car in Virginia
To gift a vehicle in Virginia, you’ll need to bring the vehicle title, bill of sale, and other documents to the DMV.
Written by Sarah Gray
Reviewed by Kathleen Flear
For the most part, gifted vehicles are tax exempt in
Virginia
. To gift someone a car in Virginia, you need to bring the title, a bill of sale or Vehicle Price Certification, and Purchasers Statement of Tax Exemption to your local DMV office, along with applicable fees.A car is a generous gift, and, for the most part, that gift will be tax exempt in Virginia—but you need to ensure you follow all the correct steps to ensure you don’t incur any unnecessary fees for your recipient.
To help you avoid attaching strings to your gifted vehicle,
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How to buy a car as a gift in Virginia
Not many people can afford to pay cash for a brand new car—so if you’re among the majority of us who can’t but you still want to gift a new car to your grandson, bring him to the dealership with you and involve him in the shopping and financing process.
A vehicle can only be donated or gifted if it has no recorded
liens
on the title. This means you need to own it outright to give it to someone else as a gift.By including your gift recipient in the purchase process, you’ll ensure they get the car they want and that there won’t be any complications or legal snafus down the road.
Key Takeaway Unless you can pay full price upfront, the best way to gift a new car is to involve the recipient in the shopping and financing process.
How to gift a used car in Virginia
The process for gifting a car in Virginia can get a little confusing, but here’s everything you need to do.
Negotiate the terms of the gift with your recipient
Just because you’re giving this car as a gift doesn’t mean it suddenly starts paying for itself. Cars are an ongoing expense, so you and your gift recipient need to sit down and decide who will pay the upfront fees associated with transferring the title, registering the vehicle, and handling costs like insurance and maintenance.
To transfer a title in Virginia, either you or the recipient will need to pay a $15 transfer fee and the registration fee, which varies depending on the type of car you’re gifting. You’ll need to use the
Virginia DMV’s fee chart
to determine your registration fee.Now for the big question: who will be responsible for the maintenance of the vehicle?
Here’s a table of the costs you should discuss with your recipient:
Cost | Virginia average |
|---|---|
Title transfer | $15 |
Registration fee | varies |
Insurance | $1,772 (liability only), $2,398 (full coverage) per year |
Maintenance | $397 per year |
Fuel | $1,574 per year |
Record of the gift with a bill of sale
Yes, this is a gift, but you still need to record the transaction through a bill of sale. You’ll simply mark the box on the bill of sale to indicate that the car is a gift.
Transfer the vehicle title
No vehicle sale (or gift) is complete until the title is transferred and recorded under the new owner’s name.
To transfer the Virginia title, the recipient will need to bring the following to their local Virginia DMV Office:
- A validvehicle inspection sticker
- The vehicle title—the recipient must complete the Assignment of Title By Owner, including the odometer reading, and complete the Application for New owner Certificate of Title andRegistration
- Proof the sale price—a copy of the bill of sale
- CompletedPurchaser’s Statement of Tax Exemptionif the vehicle is a gift between a parent and child or two spouses
- Payment for title transfer fee
Most of this step falls to the recipient of the gift, so just offering to help complete them will be a gift in itself.
Title transfer and registration can be completed on the same day at the DMV. Title transfer and registration must be completed within 30 days of the gift.
Purchase Virginia liability insurance—or full coverage
Before your gift recipient drives off in their new car, you need to make sure it’s covered with
valid Virginia car insurance
. Once you have this covered, your recipient is good to go!How to find affordable car insurance in Virginia
Now that you’ve given such a generous gift, treat yourself (and your recipient) to the gift of
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Do you have to pay taxes on a gifted car in Virginia?
Not if the gift is between parents and children or spouses. Gifts given for any other reason may be subject to Sales and Use tax.
Is it better to gift a car or sell it for $1 in Virginia?
The DMV has a gift process for a reason—it’s the most legitimate way to transfer a car as a gift in Virginia, and the safest bet if you’re not planning to sell the car for a fair market price.
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