Gifting a Car in Maine
To gift a car to someone in Maine, simply list $0 as the sales price and transfer the title. Here are the steps in detail.
Written by Shannon Fitzgerald
Reviewed by Kathleen Flear
- If you want to gift a car to someone inMaine, you’ll need to transfer the title as if it’s a private sale with $0 listed as the sales price. The gift recipient will need to pay 5.5% sales tax on the vehicle’s market value.
Whether you’re handing down an old car to a family member or purchasing a new vehicle as a very generous present, gifting a car can be a momentous occasion for both parties. Unlike most gifts, however, giving away a vehicle comes with state-specific paperwork and regulations.
Here to help guide you through the steps and requirements for gifting a car in Maine is
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How to buy a car as a gift in Maine
When gifting a vehicle, it’s important to note that you’ll need to have the title in your possession first. You cannot gift or transfer the title on a vehicle unless you’ve paid off the loan—as long as there is a
lien
on your title, it is still in the possession of your loaner. Because of this, it’s recommended to bring your gift recipient with you to the dealership if you are unable to pay for the car in full, up front. This way your recipient can be a part of the buying process, and their name can go on the loan and title.
How to gift a used car in Maine
It’s always easier to gift a car by transferring a vehicle you already own. As long as the loan has been paid off, you will simply need to list the sales price as $0 on the back of the title and proceed with the
title transfer
process.Here’s a rundown of your next steps when gifting a car to someone in Maine.
Discuss the future costs with your recipient
Buying someone a car—or handing one down—can be a huge financial help. However, there are more costs to car ownership than just the downpayment and loan bills.
In Maine, this includes a $33 title application fee and a registration fee. Unlike some other states, the recipient will also need to pay 5.5% sales tax of the market value of the vehicle.
Of course, there are other ongoing expenses you will need to discuss with your recipient, too. Once that new car is in their possession, they are responsible for costs like insurance, maintenance, and fuel—amongst several other expenses.
Here’s a guideline of the yearly costs of car ownership a driver in Maine can expect to pay:
Expense factor | Average cost |
|---|---|
Registration renewal | Varies by ownership year and market value of vehicle |
Safety inspection | $12.50 |
Emissions test (some counties) | $15.50 to $18.50 |
Insurance | $1,376 (liability only); $2,224 (full coverage) |
Maintenance and repairs | $582.74 |
Fuel | $2,661 |
Compose a Bill of Sale
While you aren’t selling a gifted vehicle, you still need a record of the exchange in order for the recipient to title and register the car.
You can do so by composing a
Bill of Sale
. In it, you and the recipient will each sign that you agree to the terms of the gift. This will act as proof of the transaction and will protect both of you should any legal trouble arise down the line. Purchase Maine liability insurance—or full coverage
In Maine, you are required to purchase car insurance with at least the
minimum liability requirements
in order to proceed with a vehicle transfer. You are always welcome—and, in fact, encouraged—to purchase more coverage than the state minimum, however. Once this has been secured, you and the gift recipient will have the proof of insurance needed to title and register the car.
Transfer the title
The most official step in gifting a vehicle is transferring the title. This will certify legally that the car belongs to your recipient.
In order to
transfer a title in Maine
, both you and the recipient will need to prepare the following documents: - An application for title—this can only be obtained by visiting alocal Bureau of Motor Vehicles (BMV) branchor contacting the Title Unit in Augusta
- The original title—the back must be signed and filled out by both parties, including theodometer disclosure statement.
- A lien release—if applicable
- Theappropriate fee
- The gift recipient will need to take these completed documents and payment to their local BMV where a new title will be issued in their name. They may also mail their payment and documents to the Title Unit in Augusta at the following address:
Title Examination & Information Unit
Bureau of Motor Vehicles
29 State House Station
Augusta, Maine 04333-0029
A new title will be mailed back within a few weeks.
Register the vehicle
Once the gift recipient has titled the vehicle, they can immediately register it. While the title transfer acts as proof of the ownership change, registration will give the recipient the legal right to drive the vehicle on the road.
To register the vehicle, you will need to present the following documents in addition to those required for the title transfer:
- Evidence of insurance
- Copy of registration application and excise tax receipt—you will need to contact yourlocal municipal officefor specific instructions on how to apply and how much excise tax to pay
- Payment
- 5.5% sales tax of the market value of the vehicle
Once the vehicle is registered, the gift recipient will receive a registration certificate. They will need to renew their registration and have the car inspected annually.
How to find affordable car insurance in Maine
Whether you’re sticking with the state minimum or purchasing more coverage,
Jerry
can find the lowest car insurance rates available. The app is free to use and instantly cross-analyzes quotes from over 50 top insurance companies to track down the most affordable premiums for your coverage needs. Once you and your recipient decide on a plan you like, Jerry can then handle all the paperwork to get your gifted car on the road as quickly as possible.
The average user ends up saving $887 a year on car insurance, so it’s definitely worth a look to save some cash while protecting your investment!
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FAQs
Do you have to pay taxes on a gifted car in Maine?
Yes—in Maine, gifted vehicles are subject to sales tax. This means either you or the recipient will need to pay 5.5% of the vehicle’s market value upon transferring the title.
Is it better to gift a car or sell it for $1 in Maine?
Because gifted cars are still subject to sales tax in Maine, it only makes sense to list the $0 gift “sale” in the transaction. The recipient will be paying the 5.5% sales tax of the market value either way—selling it for $1 will just cost them an extra buck.
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