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If you’re gifting a car in

Minnesota

, you must complete a report of sale and submit it to the Minnesota Driver Vehicle Services (DVS) either online, in person, or by mail.

You must complete a report of sale and pay to transfer the title.
You can submit this information online, in person to the DVS, or by mail.
There is no sales tax charged if the vehicle is gifted to a family member.
Discuss who will handle ongoing costs like insurance and maintenance.

How to buy a new car as a gift in the state of Minnesota

While it won’t be a fun surprise, the most straightforward way to gift a car is to bring the person who is receiving the gifted car to the dealership with you. Remember to bring

everything you may need

to complete the deal.

Remember:

Make sure that the vehicle being purchased is something you both agree on.

Clear up any potential complications for the dealership about who’s name is on the title.

Otherwise, if you want to go through the long process of buying a new car without the recipient, you’ll have to get new license plates, pay a

bunch of fees

, bring your driver’s license—and then transfer it all to someone else.

Some lenders may be willing to negotiate the transfer of a financed vehicle to another driver. As the lienholder, you must request an official lien release—but be aware this is not guaranteed.

Key Takeaway It’s a good idea to bring the person to whom you’re gifting a new car along when you go to the dealership.

MORE:

What insurance coverage do you need when buying a new car?

How to gift a used car in Minnesota

The most common way to gift a car is to transfer ownership of a car you already own. You may gift a car to someone else if:

You have paid off a newer model

You have purchased a used vehicle without the help of financing

If you are giving someone a car you already own, there is a fairly simple process in Minnesota to make the transaction legal.

Negotiate the terms of the gift with your recipient

Gifting a car comes with an expected degree of emotional reaction—but it also requires you and the gift recipient to sit down and work out what comes next. If you plan to cover the purchase price, make sure you’re getting

fair market value

and don’t be afraid to shop around to find a sale price that fits your budget.

Transfer and registration fees: Since the vehicle is a gift, the only associated fees are related to the matter of Minnesota title transfer fees. According to the

Minnesota DVS website

, the following title fees may be associated with the transfer of title for the gifted car:

Filing fee: $11

Car title transfer fee: $8.25

Vehicle transfer tax fee: $10

Per lien recordation fee: $2

Security interest assignment fee: $1

Duplicate title fee: $7.25

Not all of these fees may apply to your situation. However, you will at the very least need to pay the filing fee, vehicle title transfer fee, and vehicle transfer tax fee which amounts to $29.95.

Decide who will be responsible for paying for these mandatory fees to avoid any miscommunication that results in the certificate of title transfer fees being unfulfilled.

Ongoing expenses: It may also be in your best interest to talk about what potential maintenance, fuel, and car insurance expenses are associated with car ownership so that the person to whom the car is being gifted understands exactly what’s involved.

You can share the table below with the recipient:

Cost	Minnesota average
Title transfer	$8.25
Vehicle registration tax	$55
Insurance	$472 per year (liability only), $1,643 per year (full coverage)

MORE: Getting the right car insurance for new drivers

Record the gift with a report of sale

Gifters need to complete a report of sale and provide confirmation to the Minnesota DVS. The purpose of this submission is to legalize the change of ownership.

You may need the original title, odometer reading, vehicle identification number, and both old and new vehicle owners present to complete this process.

This can be done:

Online

In person

By mail

If by mail, send confirmation including the bill of sale stub to:

Driver and Vehicle Services

Central Office Town Square Building

445 Minnesota St, Suite 187

St. Paul, MN 55101

Transfer the vehicle title

New owners need to follow certain steps in order to have the title transferred to their name.

Here’s what you need to do:

Form: Fill out the Application to Title and Register a Motor Vehicle (

Form PS2000

Sign: Sign over the vehicle title certificate to the giftee.

Submit: Submit the necessary documents and any applicable payments to the DVS.

Sales tax: In Minnesota, the transfer of ownership of a vehicle is not charged sales tax if it is classified as a gift to family members such as spouses, parents, children, grandparents, or grandchildren.

You can get a tax exemption for the gifted vehicle if you submit the

PS2080 Affidavit Form

to the Department of Public Safety.

If you are inheriting a car from someone who is now deceased, you may need to bring a death certificate to the deputy registrar office.

Purchase Minnesota liability insurance—or get full coverage

Every vehicle must have at least the

minimum required car insurance

in Minnesota. This is true whether you’ll be paying to insure the gifted car or if purchasing coverage will be assigned to the recipient.

Once the vehicle is equipped with an up-to-date policy, the owner can cruise the streets hassle-free. Remember to compare quotes to find the insurance company with the best price for your situation.

“
Jerry
found me useful quotes immediately, so I switched over my insurance in under an hour! I’m now helping my parents use Jerry because they just bought a new car.” —Brindi J.

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FAQs

Do I have to pay tax on a vehicle I inherited?

No. If you’ve inherited a vehicle, you can transfer the ownership tax-free.

If I’m awarded a vehicle during a divorce proceeding, is it considered a gift?

Not exactly, but the process is similar. The title’s ownership will need to be transferred the same way as when a vehicle is gifted. And like a gifted vehicle, the transaction will be tax-exempt.