When you gift a car in the District of Columbia, you may be exempt from taxes and fees that come with a private vehicle sale. However, there will still be title transfer and registration fees, and you will need to fill out an Excise Tax Gift Tax Exemption Form to certify that it’s a gift from a qualified relative.
Gifting a car to someone is indeed generous, but it can be much more complicated than simply going to a store to buy a gift. To make things even more challenging, every state has different regulations governing vehicle gifts.
To help you navigate the hurdles,
Jerry, the
car insurancesuper app, is here to walk you through how to gift a car in the District of Columbia. Below is everything you need to know about car gifts: what you need to do, common mistakes, and the fees that can be exempted by gifting instead of selling.
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How to buy a car as a gift in the District of Columbia
The most straightforward way to get someone a new car is to bring your recipient to the dealership and shop together to ensure they get the vehicle they want.
Since you can only gift someone a vehicle with no
liens, you would need to pay off any loans before transferring the title. Making the recipient part of the
car buying processwill simplify the procedures and avoid any legal or financial issues.
Key Takeaway: You can only give a car as a gift if you have the vehicle title. If you are gifting a new car, bringing your recipient to the dealership would make the process less complicated.
MORE:
How to buy a new carHow to gift a used car in the District of Columbia
If you want to maintain an element of surprise, you can
transfer a car. In other words, you will need to have purchased the vehicle outright or pay off your loan on an existing vehicle before it can be given as a gift.
Even if your gift is just to transfer a new car that you own to help a loved one out, the procedure will be the same. Here are the steps to legally gift a car to someone in the District of Columbia.
Negotiate the terms of the gift with your recipient
Receiving a car as a gift can be extremely exciting, but it is important to discuss any agreements and terms with your recipient. While the car is a gift, a title transfer comes with fees, and car ownership is a big responsibility with regular costs.
In the
District of Columbia, a title transfer requires two fees: a transfer fee of $26 and the excise tax dependent on the weight of your car. You can refer to the DMV’s
list of title fees
for more information.
You should reach a consensus on who will pay for the title transfer, insurance, car maintenance, gas, and all other expenses that come with owning a car. You want to make sure that your generous gift doesn’t become a financial burden to the recipient.
Below is a table of the costs that should be considered with your recipient.
Cost | the District of Columbia average |
|---|---|
Title transfer | $26 |
Lien recording | $20 per lien |
Record of the gift with a bill of sale
Although there is no monetary exchange,
a bill of saleis still required for your vehicle gift.
A District of Columbia bill of saleis a legal record of your transaction. A copy of this document will give you protection from legal consequences that could occur in the future (e.g. abandoned car tracing back to you).
You and your recipient must sign the bill of sale to legally certify that the terms of the gift were agreed upon by both parties.
Transfer the vehicle title
To officially transfer ownership of the car to your recipient, you will need to complete the title transfer.
You and your recipient are required to complete and sign the vehicle title, indicating that the car is being transferred as a gift. If you do not have the title on hand, you will need to apply for a duplicate title (Certificate of Title/Temporary Registration and Tag Application
form DMV-CTA-001
) first.
If you are the parent, spouse, or domestic partner of your recipient, you are exempt from paying the excise tax. If you qualify for an exemption, you can also fill out the Excise Tax Gift Tax Exemption Form (
Form DMV-EGTE-01
)
After completing the title paperwork, bring it to your local DMV office. Below is a checklist of what you need to bring:
Washington, D.C. ID card or driver's license
Title certificate (original only) completed by yourself and your recipient
Proof of the vehicle's odometer reading or dealer’s odometer statement
The lien or lessee contract, if applicable
Your title transfer and associated
fees
The new title should arrive in the mail within ten business days. Once received, your recipient can register their vehicle gift in person at a DC DMV service center.
Purchase the District of Columbia liability insurance—or full coverage
Before your recipient can drive their new car, there is one final, very important, step. The gifted car must be covered by
a valid District of Columbia car insurance policy. It may be tempting to get the minimum liability insurance requirement to save money, but we always recommend getting additional coverage to ensure that the car and the recipient are fully protected.
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Jerrysaved me so much time and money! I went from $230 to $150, still with full coverage! The whole process was amazingly simple!” —Ronda S.
How to find affordable car insurance in the District of Columbia
Adding an insurance policy would be a nice touch to your gift and is much less hassle than gifting a car. While you’re looking, you can also gift yourself a cheaper policy as well! By using Jerry, you can get an affordable policy with great coverage within half an hour.
It’s this simple: download the Jerry app or go to getjerry.com. In less than 45 seconds, Jerry collects all of your information from your existing insurer. Choose from competitive quotes from some of the nation’s top insurance companies, and Jerry takes care of the rest—securing your new policy and helping you cancel your old one. No long forms. No calling around. No hard work. Just savings. The average Jerry user saves $887 a year on car insurance.
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