is a great way to avoid the taxes and fees associated with a traditional vehicle sale. Additionally, giving a car to a friend or family member is a great way to surprise them. While you’ll still need to fill out some paperwork and pay for things like the title transfer and registration fees, the gifting process is generally quite simple.

Whether you’ve got an old model you’re ready to pass on to the next generation or you’re covering the costs for a new car, gifting a vehicle is a generous gesture that will leave you and the recipient feeling great. Unfortunately, gifting a car can be surprisingly complicated because each US state has its own rules that regulate the process.

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How to buy a car as a gift in Alaska

If you think that you want to cover the costs of a brand-new car, we suggest bringing the recipient of the gift along with you when you shop. This will help you find the vehicle that best suits the wants and needs of the giftee—but it will also help make sure that they can afford any additional costs related to car ownership.

When you’re gifting a new car, you’ll also need to make sure that you can cover the total cost of the vehicle upfrontm as you won't be able to give the car to anyone else until it is completely paid off. In Alaska, a

lien check

will be performed on the car to ensure that you own it completely before you are able to move forward with the gifting process.

If the recipient is a teenage family member who has only just gotten their driver’s license, you’ll likely need to make sure that you can afford to cover the costs for things like maintenance and insurance that they won’t be able to pay for. Making the giftee part of the gifting process is a great way to avoid these common financing issues.

Key Takeaway To transfer a vehicle as a gift, you’ll need the title in hand. Because of this, bringing the recipient along to the dealership is a great idea, especially if you’re gifting a new car.

MORE:

How to buy a new car

How to gift a used car in Alaska

If you’d rather surprise your giftee with a new car instead of involving them in the car shopping process, you’ll face fewer snafus if you opt for gifting them a car that you already own. The model can still be relatively new, especially if you could purchase the car outright, but this method will help avoid financing issues that can occur if you give the person a brand-new model.

Regardless of how you choose to gif your cart, be it a surprise or a collaborative effort, you’ll need to follow these steps to make sure that the transfer is legal in Alaska.

Negotiate the terms of the gift with your recipient

Whether you’re involving the recipient in the buying process or surprising them with a grand driveway reveal, it’s important to sit down with them to discuss the terms of the gift after the excitement dies down.

You’ll need to talk about who’s going to be responsible for the

title transfer

fees, insurance, maintenance, fuel, and repair costs. You won’t want the vehicle to be a financial burden for the recipient, so if they can’t afford to maintain the vehicle you may have to float some of the costs of ownership.

Alaska

, you’ll have to pay a $15 title transfer fee when you give someone a car.

Here’s a table of the costs you should discuss with your recipient.

Cost	Alaska average
Title transfer	$15
Registration fee	$100
Insurance	$1,532 (liability only) per year
Maintenance	$1,186 per year
Fuel	$3,000 per year

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Record of the gift with a bill of sale

Even when gifting a car, you’ll still need to complete a

bill of sale

. Even if no money is exchanged,

an Alaska bill of sale

is a necessary document when you’re gifting a car. A completed bill of sale will help protect you against any unlikely legal or financial complications that may occur down the line. It also serves as a legal record of your transaction.

The bill of sale must be signed by both you and your recipient, certifying that you’ve mutually agreed to the terms of the gift.

Transfer the vehicle title

To complete the car gifting process, you’ll need to transfer the vehicle's title out of your name and into the name of the recipient. Once the title is in the recipient’s name, they will have full legal ownership rights to the car.

To complete this process, you will need to fill out the seller’s portion of the transfer section on your car’s title while your giftee fills out the buyer’s portion. The Title Transfer Form is located on the back of your car’s title.

Once you’ve completed the title transfer form, the recipient will need to visit their local Alaska DMV office along with the following documents to complete the transfer process:

Complete title transfer form

Bill of sale

Odometer verification

Valid driver’s license

Completed Title & Registration Application (

Form 812

)

$15 title transfer fee

In Alaska there is no state sales tax, so any vehicle transfer is tax-exempt.

Purchase Alaska liability insurance—or full coverage

Even if you’re leaving the cost of insurance payments up to your giftee, it is important to make sure that your gifted car is covered by

a valid Alaska car insurance policy

. Once your vehicle is insured, the gifting process is complete, and your giftee is free to take to the streets in their new car!

MORE:

Registering your car in Alaska

How to find affordable car insurance in Alaska

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FAQs

Do you have to pay taxes on a gifted car in Alaska?

No! There are no state taxes in Alaska, meaning that all vehicle transfers are tax free.

Is it better to gift a car or sell it for $1 in Alaska?

There’s a reason why the Alaska DMV has a process for gifting vehicles. If you’re not planning on selling your car at a fair market price, gifting it is the safest and most legitimate way to transfer your vehicle’s title to another owner.

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