How to Give a Car to a Friend

by Maggie McCormick

Giving a car to a friend can help your friend in a time of need, but you shouldn't be casual about the transfer of ownership just because you're dealing with your friend. Until you formally transfer the car into the new owner's name, you are legally responsible for anything that happens with the car. Go through all of the legal steps to transfer your car, so your friend has actual ownership.

Contact your local department of motor vehicles to learn your state's rules. While the general steps for transferring ownership of your car are the same, some states have additional regulations. For example, some states require notarization when signing the title over to a friend.

Sign the title over to your friend. On the back of the title of the car, there is a section about transferring ownership. You must fill that out with your friend's information. Additionally, you'll have to provide the odometer information if your car is less than 10 years old.

Release your liability. You must notify the DMV that you have given the car to your friend. In some states, there is a liability release attached to the title that you can tear off to mail in. In other states, you can release liability online.

Tip

  • check The license plates typically stay with the car, so if you have personalized plates, you should let the DMV know that you want to transfer them.

Warnings

  • close If the car is worth more than $12,000, some states will charge you--not the recipient--a gift tax. Check with a tax professional before giving your car away.
  • close You do not get a tax deduction for donating a car to a friend. You can only take the deduction if you donate it to a charitable organization.
  • close Once you have released ownership of the vehicle, your friend is responsible for registering the car in her name. She will incur the normal registration fees. Some states may charge a penalty fee if she registers it after 30 days have passed.
  • close The title of the car must be in your name. Occasionally, when a person buys a used car from a private seller, he takes the title with his information printed on the back and thinks that that is all he has to do--it's not. You need to submit this title to the DMV to get a new one in your name. Then you can use the new title to transfer ownership.

About the Author

Maggie McCormick is a freelance writer. She lived in Japan for three years teaching preschool to young children and currently lives in Honolulu with her family. She received a B.A. in women's studies from Wellesley College.

Photo Credits

  • photo_camera yellow car, a honda japanese sport car model image by alma_sacra from Fotolia.com