Updated July 2023: Gifting someone a car, SUV, or other type of vehicle is a wonderful act of kindness. Many have a hard time buying a car, even if it’s used, especially during this time where a set of wheels can cost an arm and a leg. In June 2023, CarGurus placed used car prices at an average of $29, 513. An average used SUV came with a higher price tag; $38,420! Gifting someone a vehicle in California can help them get a better job, go back to school, or take advantage of certain opportunities.
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When the average used car price is over $33,000,
a gifted car can really make a difference for someone
They can travel longer distances and get to places they can’t with public transportation. For instance, two years ago a Florida resident gifted his grandmother’s 1997 Ford Crown Victoria to a 31-year-old substitute teacher who had his own car totaled after a wreck. He had to move back home with his mom while he recovered from injuries. He mentioned in an interview that the gifted car he got turned things around for him.
The latest news of car purchases has transaction prices of $47,961 on average for new vehicles, while their used (second-hand) counterparts sell for $33,957 on average. Add to that the of maintenance, fuel, and car insurance and you can see why gifting a friend a vehicle can change their life. Jerry auto insurance comparison site puts the average car to insure in California at $1,869/year for liability only and $2,344/year for full coverage.
On the gifter’s side of things
If you own your vehicle outright, meaning you’re not making monthly payments anymore or financing, gifting it is easy. If your wheels had previous lien holders, you need their signatures on the title. If there were already lien releases, you must get a notarized Lien Satisfied/Legal Owner/Title Holder Release Form REG 166.
First notify the California DMV about the change of ownership; you have five days to do so from the gifting date. Notify the CA DMV with a Notice of Transfer and Release Liability, also known as Form REG 138, that you can complete online or by mail.
SEE ALSO: SOLD YOUR VEHICLE IN CALIFORNIA, PROTECT YOURSELF WITH AN NRL
The Model Y, the smaller of Tesla’s SUVs, is California’s best-seller in 2022, with 42,320 registrations through June (Source: California New Car Dealers Association)
You must also hand over a few documents to the Giftee. This includes the (signed by you/gifter) original California car title. If the car is less than a decade old, make sure to mark the odometer mileage on the title. And finally, proof of smog certification. Please note: If you’re gifting your car, pickup truck, or SUV to a family member smog check proof isn’t needed. It’s also not required if the vehicle is less than four years old and non- diesel.
It’s a good idea to also have a bill of sale between you and the giftee, even if there’s no payment made for the used car. A California bill of sale will record the transaction legally, protecting both the gifer and giftee. That’s why both should sign the bill of sale, certifying you agree to the gifted car terms.
On the giftee’s side of things
If you’re the one receiving the gift, first congratulations! You must transfer the California title and register the gifted vehicle in your name. You have 10 days to do so. You need the documents listed above that the gifter will hand over. This included the original title, the smog certification proof if it applies to you and odometer mileage.
You must also complete a Statement of Facts, known as Form 256. This form will allow for a tax emption since it’s a gift. Just check the Gift box when completing. Once all forms and documents are completed, you will have a new title in your name. All that’s left is to register the car so you can actually drive it. For that, you need California auto insurance and the new title.
Three Toyotas, including RAV4, Camry, and Corolla, make it onto California’s top five best-selling vehicles list through June (Source: California New Car Dealers Association)
California DMV or Online
You can title a gifted car and register it by going to your local California DMV, or do it all online with a CA-licensed DMV provider like eTags. By computer or cellphone, all you need is a few pieces of info like your VIN number. With eTags online, you can upload all the various forms needed, along with your driver’s license and insurance card. If there’s any missing information, you’ll be notified via your own eTags account. If you have unpaid tolls or parking tickets stopping your tags renewal, customer support can assist.
78 comments
My Father in Law is gifting me his vehicle. We both are in California and he has a clear title. What forms are needed and can I do this all online? How do I prove I have insurance when I don’t yet have title to the car and it is not yet registered to me? I have auto insurance on another vehicle that I own.
With eTags, you can complete the transfer of the title from your father-in-law to you online. You will not be asked for proof of insurance to complete the transfer but you must get the vehicle insured before you drive it. You will be asked to mail in the title, completed and signed by your father-in-law as the seller and you as the buyer. If he does not have the title, you can both complete form REG 227 in place of the title.
Im looking to gift a non running car in California that has an “incomplete renewal” (won’t pass smog). Can this be done? The giftee wants it as a project car and get it running themselves… Or will I have to get it running and smogged?
Yes, you can sell/gift the car. The buyer assumes the responsibility for getting the car to pass smog. The transfer of ownership won’t be hindered by it, only the buyer’s ability to get the registration. Simply complete and sign the seller sections on the title and hand the title over to the buyer. While not required, we do recommend that a complete a release of liability on the DMV website. Regardless of how long the buyer takes to submit the transfer paperwork to the DMV, submitting that may help avoid any issues with the vehicle being associated to you in the future.
Hi! I was gifted a vehicle from my friend couple years ago. Now I am thinking to sell the vehicle, do you know if i need to report capital gain when I do my 2024 taxes?
Thank you
Andrew Lee
Please contact a certified tax consultant for assistance. In general though, if the vehicle increased in value and you used it for commercial purposes, you may be required to report capital gains after the sale.
I am gifting a car that’s been idle for a couple of years to a friend. The registration and smog check is not up to date. What are my responsibilities before transferring the car? Can I transfer and gift the car to my friend and he then takes care of the smog test?
As the seller/gifter, you only need to provide the signed title. It is the buyer’s/giftee’s responsibility to take care of paying all back taxes and getting the vehicle smogged. We do recommend filing a release of liability on the DMV website once you have sold/gifted the car.
Hi, I have this same question. According to the CA DMV website, when gifting a vehicle they consider the person giving the vehicle to be the “seller”, and even though a gift, unless it is to a family member, the seller has to provide smog test. Which is correct? Thanks!
If a car is being transferred to a new owner as gift, the new owner is required to obtain a smog unless they are a “qualified” family member. That is, if the new owner is not a parent, sibling, grand-parent of the previous owner, then the new owner will be required to get a smog test if one has not already been done in the last 90 days.
Good day, I have a question. I currently live in Texas, but in two weeks I am moving to California. My sister, who also lives in Texas, wants to gift me her car. The car is registered in Texas. I want to take this car with me to California and register it there. So, my question is: What documents will I need in California from my sister to register the car in California? I understand that I need a title signed by my sister. Are there any other documents needed? Does my sister need to fill out the REG 262 form, or is this form only for California residents? How many days I will have after arriving in California to register a car? I haven’t permanent address yet, I plan to live with my friends 1-2 weeks, while looking for appointments. Also, I want to understand what I need to drive the car across the country. Only insurance and title? What is the best way to handle this? Thank you very much!
Lots of questions and unknowns when moving to a new state, we get it.
Are there any other documents needed? – Just the title, signed by your sister as the seller and you as the buyer. You’ll also need a completed VIN verification and smog test once in CA.
Does my sister need to fill out the REG 262 form, or is this form only for California residents? – This form is only for special conditions such as not having the title or the vehicle not having a compliant odometer. If either applies, then both you and your sister need to sign this form.
How many days I will have after arriving in California to register a car? I haven’t permanent address yet, I plan to live with my friends 1-2 weeks, while looking for appointments. – You have 30 days from the date on title to register the car in your name without penalties being assessed; and those are hefty in CA so transfer and register as soon as you can. You’ll need to consider using your friends address on the registation and then changing it later.
Also, I want to understand what I need to drive the car across the country. Only insurance and title? What is the best way to handle this? – If your sister’s registration is valid and she leaves the TX plates on the car as well as keeps the insurance active, then you there is nothing you need to do. If she either cancels the insurance and/or does not let you take the TX plates, then you need to contact an insurer to get the vehicle insured and you need to get get temp tags from the TX DMV.
Hello, my parents are purchasing me a car in Oklahoma and are going to gift me (in California) the car so I can avoid the taxes. If they have an existing lien on the new vehicle, they are going to make the payments, can they still transfer the title to me while remaining responsible for the lien?
In order for the title to be transferred to you while the vehicle remains with an unsatisfied (unpaid) lien, you would have to coordinate the transfer with the lien holder. They would likely process a new credit application with you and your parents on the loan and they would also take care of the transfer. Depending on how the loan is structured, they may or may not require your parents to also be on the new title and registration. Best of luck.
My brother is going to purchase a car for 40,000 and wants to gift it to me after. Is there a way for him to avoid the DMV fees from registering the car since he will be gifting it to me after?
When you brother registers the car in CA, he will be required to pay the registration fees along with the transfer fees and the vehicles use tax. However, since California registrations and fees paid transfer to a new owner and assuming that you will keep the car registered in CA, you will not have to pay the registration fees once you transfer the gifted car to your name since they were already paid.
If I’m gifting / selling a car to a friend who lives in California and the car is registered in Georgia in a county that doesn’t require smog testing an I still legally obligated to provide a smog test? Is it different if you’re selling a car versus gifting a car.
You are not required to get a smog test since the CA DMV only accepts smog certificates done by licensed CA smog stations. It will be your friend’s responsibility to get a smog test when they are registering the car in CA. Let your friend know that the smog certificate has to be dated within the last 90 days based on when they go to complete the transfer. In other words, they should not wait more than 90 days after getting the CA smog test done to register the car or else they will be required to get another smog test.
HI there-My dad is gifting me his car. He is in California…I live in Colorado. It will stay in CA and will use it when we visit him. So transfer the tile, register it in my name and then does it need insurance in CA or does my CO insurance work?
Hi, you will need to have CA insurance in order to keep the CA plates. Your insurance company might be able to include a policy for CA. While you will need to show proof of CA insurance when you are transferring the title, you will need to make sure that you have CA insurance at least soon after you transfer to avoid your registration being blocked with an insurance suspension. The transfer can be completed at any DMV office, private tag office, or online with eTags. Best of luck.
Hi! I’m planning on gifting my car (registered in CA) to my parents who live in FL. Do they need to come to CA to do the paperwork? What kind of paperwork do they need?
Your parents do not need to go to CA to do any paperwork. All of the paperwork is done in Florida, assuming that that is where they will register the car. A VIN inspection must be completed and, if the car is not yet in FL, it can be done in CA by a CA Police Officer. If the car is already located in FL by the time they are ready to register it, then a Florida Notary, such as one that is often available at no charge at their bank/financial institution, can complete the VIN verification. Along with the VIN verification form, they will need the title completed and signed by you as the seller and you parents as buyers, a copy of Florida insurance, and their IDs. They can complete the title transfer and register the car in FL online with eTags. Best of luck.
Hi, I’m buying a used car for a friend as a gift. Is there a way I can just add his name to the title at purchase or do I need to purchase it under my name only, then transfer it to him? Thanks.
Yes, you can simply have your friend complete and sign the title as the buyer, assuring that the seller does not write in your name on anywhere on the title. If they do (or did), then you would need to first transfer the vehicle into your name and then into your friends name. Lastly, taxes will be due since the vehicle was purchased from (presumably not gifted by) the seller. Whatever the first title transfer is from the seller, either to you or directly to your friend, taxes would be due then. Best of luck.
My friend (in California) is gifting me a vehicle valued at $16,000 according to kelly bluebook. My understanding is that as long as we fill out the Transfer of Title and the Statement of Facts is that I will not have to pay any sales/gift taxes this way. There is no lien on the vehicle. she holds the title.
You are correct: You will not be required to pay sales tax if your friend is gifting you the vehicle. You’ll need the title currently in her name, signed over to you. At a DMV office or online with eTags, you can title and register the vehicle in your name.
Is this the same answer if the gifter (in California)is giving to a family member out of state? There is no sale it’s just Grandmother giving to granddaughter. So have grandmother sign title and then notify DMV she gifted car, or just do nothing and granddaughter registers it in home state?
That would depend on the sales tax exemptions of the DMV in the state where the vehicle will be registered. If the person to whom the vehicle is being gifted to while not apply for a new title in California, then CA DMV requirements won’t apply. Some states only allow sales tax exemptions for gifted vehicles in specific situations like parent to child or between siblings but not applicable to gifts between other family members. Contact the DMV in the state where the family member would transfer and register the vehicle to confirm.
If I gift a car to a friend, do I need to provide a smog certificate to DMV? Or is that just when you sell a vehicle? Vehicle is registered and smog won’t be due again until November, 2024. My understanding is that I don’t need a smog certificate and no tax is due.
Hi Diane, it’s the buyer’s (or new owner’s) responsibility to pay tax and registration fees and it would also be their responsibility to take care of smog if/when it’s due. It is important though that, if you happen to sell the vehicle within three months of the November expiration date, that you let the new owner know that, in order to renew the registation, they would have to get a new smog.
I want to gift a car to my son. He is in California. I am in Canada and the car is registered in Hamilton, Canada. What do I have to do to transfer the car to him?
Assuming the car does not have a US issued title since its registered in CA, this would be considered a direct foreign import. Your son can find all of the information to transfer and register the car in his name on this CA DMV page: https://www.dmv.ca.gov/portal/vehicle-registration/new-registration/register-an-imported-vehicle/
Hello,
I am receiving a car registered in CA as a gift. I am located in Phoenix, AZ. I plan on going to CA to do the title transfer. 1) Would I have to pay any sort of taxes? 2) How am I supposed to drive the car from CA to AZ without being pulled over or fined? 3) What sort of documentation will I need to get the title transfer done? Thanks in advance!
The title transfer should be done in Phoenix as an out of state title transfer. eTags doesnt operate in AZ, pls check the AZ DMV for more info.
My friend wants to give me his car. It failed the smog check, it is not registered, and he lost the title.
What do I need to do transfer ownership to me?
If he lost the title, he can request a duplicate title/title replacement with eTags online. Then he can sign over the title to you and you in turn can apply for a title transfer and registration online.
Hi I’m Amaury, I wanna buy a used car from a private owner but since I don’t have a license yet, the title and registration is gonna go under my girlfriend’s name. My question is after I get my license would she then be able to gift me the title of the car?
If she holds the title then during that time she’s technically the owner. To gift it to you later, she’ll have to assign (sign over) the title to you and then you would have to apply for a title transfer and registration. When you’re ready eTags can help online for all transactions.
Hi, how do I gift a car to my friend if I still owe a loan on it? He is planning on getting his own loan to pay off the balance.
For you to gift a car, it would have to be yours to begin with and since you haven’t paid off the loan, the car is technically not yours it’s the lien holders. You can try talking with finance company to explain situation and perhaps they can give you advice. Maybe your friend’s loan can pay off the balance.
Hi, I’m trying to gift a car to my friend but I haven’t had it registered or insured for a few years. It’s non-op status. I’m trying to understand the smog certification process (I’m in CA) and who is responsible for getting it. Can I get it smogged if it isn’t registered or insured?? If not, how do you get it registered without having the smog certificate? The order is a little vague. Thank you!
As the vehicle seller, you are legally required to provide the buyer with a valid smog certificate at the time of sale. The buyer should also be informed that the provided smog certification is only valid for 90 days after the date it is issued. You’re still considered a seller even if it’s a gift. To register the car, you’ll have to get it out of non-op, then get insurance to register.
My daughter relocating to CA at end of month: We will gift a Maryland car to her as part of her relocation. Would it make more sense to gift the car to her here first?? i.e. register / title the car in her name in Maryland before she takes it out & subsequently registers it in CA?
Not really because if you do, she’ll have to transfer it again in CA. Once in CA she can do an out of state title transfer and register in her name. She also needs CA car insurance. She can process all paperwork online with eTags.
Hello –
My ex-husband is ‘gifting’ our daughter a car he inherited without my permission. We are in California. He expects me to pay all of her car insurance (16 yr old), registration, car expenses etc. Of course, our daughter is very excited about the car. However, I cannot afford all of this. He literally dropped the car off and handed our daughter the keys, title (signed by him), registration invoice/letter – due in Oct 2023, and the smog inspection. We don’t talk per court orders.
Do I have any recourse? What happens if I never fully transfer Title (never sign or take it to DMV)? It’s currently in his name obviously and so is the current insurance. I recognize the registration can be suspended but only if the DMV is notified that a transfer is in the works, correct?
Thank you very much!
Seems like this situation would be better served with legal advice. But typically if a title isn’t transferred then the person who holds the title is still responsible for it. But your ex may file a nrl to release him from all responsibilities connected to vehicle, like parking tickets, tolls, accidents and so on. You may want to look into a PNO, Planned Nonoperation status
My son is gifting me an Oklahoma registered car. I’m in California. What documents will I need?
Hello, here’s a list of documents and forms needed. You can apply for a title transfer and registration for out of state vehicle online with eTags.
Out-of-State Title, Application for Title or Registration REG 343, REG 31 Verification of Vehicle and Smog test
Possibly required:
Weight Certification
REG 256 Statement of Facts
REG 4008 Declaration of Gross Vehicle Weight
REG 5 Affidavit for Transfer Without Probate
Do DMV need insurance if my friend is gifting car to me.
If the cars value 35000, do i have to pay any gift tax.
Proof of insurance is needed to get your vehicle registered and allow you to actually drive it. Your friend must sign the title over to you, so that you can apply for a title transfer and register at same time. No taxes on gifted vehicles.
Thanks for the quick replay,
my friend has insurance but i doesnt have insurance, without the car being on my name how can i get insurance?
Contact an auto insurance provider for details on policies they have.
A friend is gifting me a car registered in WA state that I will need to register in CA and transfer title here as well. What exactly is needed since this is out of state?
Hello there, for transferring a used vehicle with an out-of-state Title and an out-of-state Registration you’ll need:
Out-of-State Title. You can process the paperwork online.
Application for Title or Registration REG 343
REG 31 Verification of Vehicle
Smog test
Possibly required:
Weight Certification, REG 256 Statement of Facts, REG 4008 Declaration of Gross Vehicle Weight, REG 5 Affidavit for Transfer Without Probate
So no taxes on a gift from an out of state vehicle?
No taxes!
I will be gifted a 1999 car from a friend in CA and then driving it to OH, where I live, to register the car in OH. We will indicate the transfer by signing the original title. Do I need to transfer the title first in CA (to me and my Ohio address), or can I just take the signed CA title to OH and do the out-of-state title transfer there? Do I need any special paperwork with me as I drive cross country? I will insure the vehicle before I drive. What I understand is that the Gifter needs to fill out the NRL and sign the title over. The giftee needs to do the title transfer in the appropriate state (OH). Do we need a Bill of Sale for the gift and if so is it REG 262 or REG 135 (I couldn’t find 262 online)? The car is currently registered in CA – do I need a recent smog certificate if I’m moving to a county in Ohio that doesn’t require a smog certificate? Do we need the Statement of Facts (Form 256) if it is not going to be registered in CA?
This is standard out state transfer in OH. You need the title signed over to you, out of state VIN inspection from OH, and insurance.
No bill of sale required nor any of those CA REG forms. Depending on what county you live in OH, you could need an emissions check.There are 7 counties that require them.
If I want to transfer a car with no title what paperwork do I need ?
• Reg 227- Transfer with duplicate title
REG 262 – Bill of Sale
Do I also need a smog before transferring and provide proof of owner ship in order to transfer with no title ?
Does that goes the same for Gifting without title ?
Thank you
You can’t transfer a title if you don’t have one. If you want to gift someone your car, you’ll need to assign the title to them so they can transfer the title. If you had the title at one point, you can request a duplicate title also called a title replacement. You can do so online. Once you have it, assign it to new person, and they’ll be able to transfer it into their own name.
How are registration fees determined for a gifted car?
Gifted cars aren’t subject to sales tax in California, but the standard title transfer and registration fees still apply. You can register the car online.
My california vehicle registration is due 7/21. I am going to gift a vehicle to my daughter before that date. She is then going to move it and register is out of state (which will be past the 7/21 due date). Do I need to pay the registration?
It’s always recommended to register especially if you’ll be driving it. You may be able to get credited by contacting DMV, but not a guarantee. It depends on which state you’re moving into. You want to make sure it’s insured too before your daughter drives. To register online, your daughter can visit eTags.com Seems like you (the mom) also needs to sign over the title to your daughter when gifting. She’ll require a title transfer as well in the state she’ll be moving to.
Hello
We are gifting our vehicle registered in CA that we own outright to my dad who resides in TX. Anything we need to do other than fill out Reg form138?
Hello. Make sure to sign the title over to your dad! He’ll need to contact TX DMV to find out about any further requirements.
Is it legal to be gifted a car from a friend? Will we still be exempted from tax?
Yes your friend can give you a car, but you’ll have to transfer the title in your name and register it as well. Make sure you have insurance from a provider in your state.
I was gifted a car by assignment in NC 5 days before the prior owner died. How do I get title in CA? Do I need to establish ownership in NC first or simply bring NC title with assignment on back?
Hey there, that would be an out-of-state title transfer. You can get all paperwork done in CA, since that’s where you’ll register. If the title is already assigned to you with his signature you shouldn’t have a problem.
What if they passed away before having a chance to sign the title over to you. How do you go about transferring the title?
You would need to be a designated beneficiary, such as a surviving spouse named on the death certificate, or you will need court or other legal documents confirming that you are the executor or otherwise representative of their assets or estate. We recommend seeking legal counsel in some cases. Best of luck.
If I am gifted a car but it is already registered until December of this year. Do I still have to pay to register before december?
If you got a car as a gift, you must title and register the vehicle in your name. You can process paperwork online with eTags
I’m looking to register a gifted car for myself.
Hi Brianna. That’s great! As long as you have the title, insurance, and your license, eTags can help you register the vehicle! Visit our site and place an order for title transfer! I hope this helps!
So my dad is gifting me an suv but the tags are expired will they have to be paid if the vehicle is transferred to me?
Yes, if the tags are expired you will need to pay the renewal fees along with title fees when you transfer the title and registration to your name.