can be executed through the same vehicle title transfer process that you would use for a private sale—but you’ll be exempt from sales tax! This process can be taken care of at your local South Dakota Motor Vehicle Division (MVD) office.

Unfortunately, gifting a vehicle isn’t as simple as tossing the keys over like in the commercials. South Dakota has a vehicle transfer process that consists of some formal paperwork and additional fees.

We know, just the thought of paperwork is exhausting enough to head to bed and call it a day. Luckily, the

car insurance

comparison super app

Jerry

is here to give you a step-by-step guide to a stress-free process. We’ll cover how to gift a vehicle, the proper forms to fill out, and how much it’s going to cost.

How to buy a car as a gift in South Dakota

We’ve found it to be a more financially responsible idea to involve the gift recipient in the shopping and financing process. This ensures the recipient gets the car of their liking and there is less room for financial or legal speed bumps.

Because remember, a vehicle cannot be gifted if you do not own the vehicle outright. Unless you can purchase the vehicle with cash upfront, you will have to take out a

lien

car loan

. So if you want the car to truly be a surprise, your name will have to be on the loan and title.

Key Takeaway Involving the recipient of your gift in the process can help avoid any legal or financial drama—it’s worth sacrificing the surprise.

MORE:

Car Loan in South Dakota 2022

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How to gift a used car in South Dakota

Once you’ve fully paid off any outstanding auto loans, you can

transfer the title of a vehicle

you already own to a new recipient as a gift. This process is executed for a variety of reasons, like giving a first car to a teenager, helping out a loved one, or passing down a family tradition.

Whatever your reason might be, let’s break down how to legally transfer a vehicle in South Dakota.

Negotiate the terms of the gift with your recipient

The surprise has been announced and now it’s time to reach an agreement over the financial obligations that must be satisfied during a title transfer.

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

Cost	South Dakota average
Standard titling fee	$10
Title transfer fee	$10
Excise tax	4% of the vehicle’s purchase price

While these fees are not substantial, it’s important to think about the bigger picture too. Can the person you're gifting the vehicle to afford affiliated costs like maintenance, fuel, and insurance? It’s important to discuss these topics prior to the title transfer to ensure your gift does more good than bad.

Record of the gift with a bill of sale

Simply put, a bill of sale is a legal record of the transaction. This will act as a point of reference for any legal or financial disputes over the gift. Here is a link to a

bill of sale form

in South Dakota. This is the information you’ll need to complete the form:

Date and price of exchange ($0)

Make, model, and year of vehicle

Gift giver’s information and signature

Vehicle recipient's information

Transfer the vehicle title

To officially

transfer the vehicle title

, you’ll have to head to your local South Dakota MVD or county treasurer.

To initiate the transfer, the gift giver will have to apply for a seller’s permit. You can apply for this permit online or with your county treasurer. This permit will be active for 30 days.

Next, you will file the appropriate paperwork to execute the transfer:

Properly signed vehicle title that includes the new owner

Bill of sale ($0)

Odometer disclosure

if the vehicle is nine years old or less

Once you successfully transfer the title, the giver and the receiver have some more responsibilities.

The giver must send a Seller's Report of Sale (

Form MV2200

) to the South Dakota county treasurer within 15 days.

The recipient of the vehicle has their own duties. Within 45 days, you are required to complete the following:

All paperwork provided by the giver

Completed Application for Motor Vehicle and Registration (

Form MV-608

)

Payment of all aforementioned fees

If only gifting a car was as simple as slapping a bow on the hood and saying surprise! But, you should have all the information you need now to properly transfer the title.

Purchase South Dakota liability insurance—or full coverage

As a part of negotiating the terms of the gift, make sure to discuss who is covering insurance costs—the gifter or the recipient. Make sure you both are on the same page.

South Dakota makes all their drivers carry a minimum amount of liability insurance to legally operate a vehicle, so it’s an important discussion to have.

MORE:

What is a certificate of title?

How to find affordable car insurance in South Dakota

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The average Jerry user saves $887 a year. That’s a South Dakota special right there!

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FAQs

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

No, you do not have to pay sales tax on a gifted car in South Dakota.

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

The processes in South Dakota for a gift and sale are very similar, so it’s not necessarily better or worse. But sales tax will be accounted for anything over $0.

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