Bill of Sale for Car Given as Gift: Everything You Need to Know

If you’re giving someone a car as a gift, it’s important to protect yourself and the recipient by properly documenting the transaction. One way to do this is by creating a bill of sale. In this article, we’ll cover everything you need to know about creating a bill of sale for a car given as a gift.

What Is a Bill of Sale?

A bill of sale is a legal document that serves as proof of ownership transfer between two parties. It typically includes details about the buyer, seller, and item being sold (in this case, the car). A bill of sale can be used in situations where there is no title available or if the parties want additional documentation beyond what’s included on the title.

Why Do You Need a Bill of Sale When Giving Someone a Car As Gift?

While state laws vary on whether or not you need to complete paperwork when gifting someone with an automobile, having proper documentation in place can help protect both parties involved in the transaction. Here are some reasons why you may want to consider getting a bill of sale:

  • Proof: The document provides proof that you gave away your vehicle.
  • Liability: If anything happens with the vehicle after it has been gifted – from parking tickets to accidents – it will be clear who owns it and who should address these issues
  • Taxes: Tax authorities require gifts above certain value thresholds ($15k per year at time-of-writing)
  • Peace-of-Mind: Increases confidence based on concise communication

What Information Should Be Included in Your Bill of Sale?

Here are some key pieces information that should be included in your bill of sale when giving someone a car:

  1. Date – include date created (and any other relevant dates such as “to be transferred” dates)
  2. Buyer’s name and contact information
  3. Seller’s name and contact information
  4. Vehicle description – the details of the car to be gifted, including make, model, year, color, body style or VIN
  5. Terms of the transaction – state that the vehicle is a gift with $0 sum payment
  6. Signatures for both buyer and seller – include printed full names with signatures.

For a more formal agreement (such as may be required by local laws or regulations), get in touch with your local motor vehicles office to see if they have pre-approved templates available for creating a Bill of Sale specific to gifting scenarios.

Steps For Completing A Bill Of Sale

Here are some steps you can take when completing a bill of sale:

  1. Acquire Necessary Forms: Inquire about any forms needed from your country’s DMV/local authorities as well as BestInvesters website
  2. Fill Out Forms Completely: Make sure all sections are completed fully.
  3. Record onto Paperwork: Sign forms appropriately.
  4. Retain Copies: Get appropriate copies for both parties involved.
  5. Notify Insurance Provider.

Tips for Creating an Effective Bill of Sale:

  • Read up on current regulation changes at your local vehicle licensing centre (e.g., due to Covid19 regulations may have changed)
  • Use market research data sites like KBB and NADA guides before filling out values
  • Print two copies so that both parties can keep one permanently

Properly documenting gifts such as cars using Bills-of-Sale is important; it helps protect against complications arising from ambiguities down-the-line after giving away expensive gifts without proper documentation rather than having each side agree explicitly on what has been agreed upon .

FAQs

Q: Do I need to pay taxes on a car that was given to me as a gift and has a Bill of Sale?

A: In most states, there will be no sales tax due if the car was gifted to you from someone who is not a dealer. However, each state varies in their policies regarding registration fees and other taxes that may apply.

    Q: Can I use a generic Bill of Sale form when gifting a car to someone?

    A: You can use a generic Bill of Sale form when gifting your car to someone, but it’s always best to check with your local DMV or state department of revenue for any specific forms or requirements they may have.

      Q: Is it necessary for the seller/owner of the vehicle to sign the title over if they are giving it away as a gift and providing a Bill of Sale?

      A: Yes, even though you were given the vehicle as a gift, you will still need to obtain ownership by having the previous owner sign over (assign) their interest in the vehicle’s title. The signed-over title should then be submitted along with all applicable fees and documents required by your local DMV/state department of revenue.