can help you avoid the hassle and fees of selling your vehicle in a private sale. Gifting a car does come with some fees, including title transfer and car registration fees.

To gift a vehicle in Arkansas, you must own it outright.
The process for gifting a used car is the same as for gifting a new car.
To gift the vehicle, you’ll need to file a bill of sale and complete a title transfer.
Also think about who’s going to pay for the car’s registration and
Arkansas car insurance
.

How to buy a car as a gift in Arkansas

When it comes to gifting a car, you have two options from the start:

Gift a car that you already own

Buy a new car

(or used car)

If you’re going to purchase a car, we suggest bringing the recipient with you to the dealership. While this might dash any hopes of a grand driveway surprise, it will ensure that the new owner is getting a car that suits their needs and that they can afford.

It will also simplify the gifting process since a vehicle’s title can only be transferred to another owner if there are no

liens on the car

. This means you have three options if you wish to gift a newly purchased vehicle:

Pay for the in full

Finance the vehicle, then apply for a lien release to make any remaining debts on your vehicle the financial responsibility of the recipient

Involve the new owner in the financing process as a co-applicant

If you can’t pay for the car in full, including the new owner on the

car loan

means you avoid the hassle of applying for a lien release from the lienholder.

If your recipient is a teenager who’s only just getting their license, making them part of the car buying process will not only make sure that they love their new car but also help to avoid any legal or financial issues later on.

Key Takeaway: You’ll need the title in hand before you can give a car as a gift—so if you’re trying to gift a new car, strongly consider involving the giftee in the buying stage.

How to gift a car you own in Arkansas

If you just can’t pass up the opportunity to surprise your giftee with a new car in the driveway, you’re better off transferring a vehicle that you already own.

This doesn’t mean that the model needs to be old. On the contrary, you can still gift a relatively young used model, so long as you have it completely paid off.

Regardless of whether you choose to gift a new or a used vehicle, the process is the same. Here’s what you’ll need to do if you want to legally gift a car in Arkansas:

Negotiate the terms of the gift with your recipient

Whether this person is a friend or a family member, the two of you will need to work out who is going to be financially responsible for:

The fees associated with transferring the car’s title

Insurance

Maintenance and repairs

Fuel costs

If your giftee can’t afford the costs of ownership, you may have to cover them.

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

Cost	Arkansas average
Arkansas title transfer	$10
Registration fee	$17
Insurance	$1,741 ( liability coverage only), $2,450 ( full coverage ) per year
Maintenance	$1,186 per year
Fuel	$2,649 per year

Record of the gift with a bill of sale

You’ll be required to fill out a bill of sale even though there is no actual money being exchanged between you and your giftee. The bill of sale isn’t just about money—it’s a notice of transfer of ownership.

An Arkansas bill of sale requires both you and the recipient to sign to certify that you have agreed to the terms of the exchange. This will protect you in the unlikely event of future legal issues.

Arkansas bill of sale

is located on the same form as your odometer disclosure statement (

Form 10-313)

, which will be required for gifted cars that are less than 20 years old. To complete the form, you’ll need the gifted vehicle’s:

Year

Make

Model

Vehicle Identification Number (VIN)

Transfer the vehicle’s certificate of title

Completing the title transfer for the gifted vehicle will make the vehicle the legal property of the giftee.

In addition to completing the car title transfer form with the Arkansas Office of Motor Vehicles (OMV), the recipient of the gift will need to gather the following documents before moving forward:

Completed Official Release of Lien or Permission to Issue a Replacement Title (Form 10-315)

The vehicle’s title

The Manufacturer’s Certificate of Origin (if requested)

An odometer statement (Form 10-313) (also located on the back of the title)

A bill of sale (Form 10-313)

Driver’s license info for both the gifter and giftee

Completed Vehicle Registration Application, which also serves as the Arkansas title application

$10 title transfer fee (If paying by check, it should be made out to the Department of Finance and Administration)

Once they have all the necessary documentation, the recipient will need to visit their local Arkansas State Revenue office to complete the title transfer process.

In the state of Arkansas, any vehicle transfer is tax-exempt.

Keep in mind: If you’re gifting a vehicle you already own, be sure to remove the license plates before sending it off with the new owner.

Purchase Arkansas liability insurance—or full coverage

Whether it’s for you or your giftee, having

a valid Arkansas car insurance policy

is not only important for protecting you and your vehicle, but it’s also a legal necessity.

Once your recipient has completed the title transfer process, they’ll need to add the vehicle to their insurance policy so they can show

proof of insurance

at the Arkansas Department of Motor Vehicles (DMV).

This is the last step in the gifting process—after this, your giftee is free to drive off in their new car!

MORE:

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

No! Under Arkansas law, you’re not required to pay use tax on a vehicle you receive as a gift.

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

The Arkansas OMV has a car gifting process in place for a reason—it’s the most legitimate way to transfer a car as a gift in Arkansas, and the safest bet if you’re not planning to sell the car for a fair market price.