can help you avoid the hassle and fees of selling your vehicle in a private sale. However, you will still be subject to title transfer and registration fees, especially if you are financing the vehicle’s operation costs on behalf of the recipient.

Giving someone a car as a gift is an incredibly generous gesture, though it is far more complicated than other (less involved) gifts. The process of gifting a car is especially complex because each US state has its own rules and regulations on how vehicle gifting has to be done.

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How to buy a car as a gift in Alabama

If you’re planning on gifting someone a brand new car, it’s best practice to bring them to the dealership with you. This will ensure that the recipient is getting a car that they love and one that they can afford to insure and maintain.

Remember, you won’t be able to gift a vehicle that you still owe money on. If you decide to

purchase a new car

for your giftee, you’ll need to make sure that you pay for it in full before you can initiate the

title transfer process.

If your recipient is a teenage relative only just getting their

Alabama driver's license

, making them part of the car buying process will make sure that they love their new car and help 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, you should strongly consider involving the giftee in the car buying process.

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How to gift a used car in Alabama

In the case that you want to surprise your loved one with a new car via a grand driveway reveal, you’ll probably want to transfer a vehicle that you already own.

The car doesn’t have to be old or run-down, especially if you’re able to buy a newer model outright. So long as the vehicle is completely paid off, no matter how new it is, you’re in the clear to gift it to another driver.

Regardless of how you’re planning on orchestrating your gift, you’ll have to follow the same process. Here’s what you’ll need to do if you want to legally gift a car in Alabama.

Negotiate the terms of the gift with your recipient

Whether you’re gifting to a friend or a family member, whether they are in on the gift or if they’re surprised, you’ll need to sit down with your giftee to talk about the car. Together you and your giftee will need to reach an agreement about who is going to be responsible for title transfer fees as well as the vehicle’s regular ownership costs.

In Alabama, a title transfer requires a $15 transfer fee.

You’ll want to be sure to determine who will be paying the transfer fee and things like car maintenance, insurance, and fuel costs associated with the gifted car. 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	Alabama average
Title transfer	$15
Registration fee	$45
Insurance	$1,627 (liability only), $2,021 (full coverage) per year
Maintenance	$1,186 per year
Fuel	$2,649 per year

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Record of the gift with a bill of sale

In Alabama, gifting a car follows the same general process as

selling one between two private parties

Because of this, you will need to provide a notarized

bill of sale

for a gifted car, as well as a vehicle gift affidavit (

Form MV IRP-15

). Yes—even if there’s no money changing hands, an Alabama bill of sale acts as a legal record of your transaction. Having a copy in your record could protect you from legal consequences down the line.

Both you and your recipient should sign the bill of sale, certifying that you agreed to the terms of the gift.

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Transfer the vehicle title

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

The vehicle recipient is responsible for completing the Alabama MVD vehicle title transfer form. You are responsible for completing all required information on the vehicle’s title certificate before completing the bill of sale.

In Alabama, any vehicle transfer is tax-exempt.

Once you and the recipient have completed all the necessary paperwork, you will need to visit your local Alabama county

license plate

issuing office to submit your paperwork and $15 title transfer fee.

Purchase Alabama liability insurance—or full coverage

Whether you are taking financial responsibility for insuring the gifted vehicle or helping your recipient find good insurance, it’s important that the car is covered with a valid

Alabama car insurance

policy.

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

Try using

, the

, to help you find

. By comparing

from several insurance providers, you can sleep peace of mind knowing your giftee is safely driving Alabama roads.

MORE:

Top auto insurance providers in Alabama

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FAQs

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

No! Under Alabama 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 Alabama?

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

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