Gifting a Car in Washington
To gift a vehicle in Washington, submit a bill of sale, new title application, current title, and payment for fees to the Department of Licensing.
To gift a vehicle in Washington, bring a completed bill of sale, new car title application, the current vehicle title, and payment for the $12 title transfer and applicable registration fees to your local Washington Department of Licensing Office.
- If you gift a car in Washington, your recipient won’t need to pay Washington sales/excise tax on a gifted car if you can prove that these have already been paid.
- You must transfer the title and register the vehicle in the new owner’s name within 15 days of the gift.
- The easiest way to gift a new car is to involve your recipient in the car-buying and financing processes.
- If you gift a car in Washington, your recipient won’t need to pay Washington sales/excise tax on a gifted car if you can prove that these have already been paid.
- You must transfer the title and register the vehicle in the new owner’s name within 15 days of the gift.
- The easiest way to gift a new car is to involve your recipient in the car-buying and financing processes.
How to buy a new car as a gift in Washington
The easiest way to gift a
brand-new car
is to bring the recipient with you to the dealership so they can be part of the shopping and financing process.Keep in mind: You can only gift a vehicle if you own it outright. A
car with a lien
will be much harder to gift if you’re the only person signing the paperwork. Consider the following advantages of bringing your recipient to pick out their new vehicle:
- Financing agreements: You and your recipient can co-sign acar loanif needed. That way you can take responsibility for the payments without jumping through extra hoops to assign ownership to your giftee
- Gift security: You’ll want to be sure your recipient is getting exactly the car they want.
Key Takeaway If you can’t pay the full price upfront, the best way to gift a new car is to involve the recipient in the shopping and financing process.
How to gift a used car in Washington
Gifting a used car can be a lot cheaper than gifting a new car since you ideally already own the car in full; however, there are a few extra steps and paperwork that you’ll need to consider when gifting a used vehicle in Washington.
Negotiate the terms of the gift with your recipient
Sit down with your recipient and determine who will be responsible for the following gifted car costs:
- Washington transfer fee: $12
- Vehicle registrationfee: Varied depending on your county; contact your county’sLicensing Officeto determine your fee.
- Washington sales/use tax: 0.3% use tax plus sales tax (avg. 8.841%) if the vehicle is less than seven years old. Provide proof for your gift recipient if you’ve paid all sales and use taxes already.
- Vehicle maintenance: Car ownership costs for fuel, repairs, andregular maintenance taskscan add up quickly for your recipient, unless you plan on handling them.
- Car insurance: If your gift recipient didn’t have car insurance before, they’ll need it now. Who will be responsible for paying the insurance premium?
Use the table below to discuss the most significant costs with your recipient:
Cost | Washington average |
|---|---|
Title transfer | $12 |
Registration fee | Varies |
Insurance | $1,860 (liability only), $2,492 (full coverage) per year |
Maintenance | $390 per year |
Fuel | $2,709 per year |
Record of the gift with a bill of sale
Even though no money is changing hands, you still need to record the transfer of ownership with a bill of sale:
- You and the gift recipient must sign the bill of sale.
Purchase Washington liability insurance—or full coverage
Your recipient will need a car insurance policy that meets
Washington’s minimum car insurance requirements
before they can assume ownership or register the vehicle.“Just for state minimum liability, I was getting quotes from $70 to over $100/month until I foundJerry. Now my car insurance is under $30/month, or $140 for 6 months. Thank you, Jerry!” —Frank S.
Transfer the vehicle title
The most important step in the gifting process is the transfer of title. This will legally transfer ownership of the vehicle from the current registered owner to the new owner.
To complete the vehicle title transfer process:
- Sign your current title over to the gift recipient andreport the sale to the Department of Licensing.
- Complete an odometer disclosure statement if the car is less than 10 years old. (This form must be requested in person from a vehicle licensing office or by calling 360-902-3770.)
- Have your recipient bring the completed paperwork and title transfer fee to a DOL office.
- Complete the vehicle registrationafter the title transfer is taken care of.
Keep in mind: Title transfer and registration must be completed within 15 days of the gift.
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FAQs
Do you have to pay taxes on a gifted car in Washington?
No. As long as the previous owner paid Washington Retail Sales Tax or Use Tax, and no money changed hands, you do not have to pay taxes on the gifted vehicle. Washington will even credit you for any previously paid taxes if the original owner lived out of state.
Is it better to gift a car or sell it for $1 in Washington?
The Washington gifting process is the most legitimate way to transfer a car in Washington, and the only way to avoid repaying taxes. Not to mention, the purchase prices in the state of Washington must be within $2,000 of the fair market value—so it’d be pretty hard to sell a car for $1 anyway.
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