Gifting a Car in Montana

Gifting a car in Montana is the same as selling it—you’ll need a bill of sale, a title transfer, and a lien release form.
Written by Joshua Levy
Reviewed by Kathleen Flear
background
Gifting a car in
Montana
is an identical process to selling a car privately—meaning you’ll need to fill out a bill of sale, transfer the title, and pay any processing fees along the way. You may also need to pay federal gift taxes, depending on the car’s value.
When you give someone a car, you’re saving them thousands of dollars up front and making their day-to-day life much easier. Everything from trips to the grocery store to daily commutes becomes much easier when you own a vehicle. But gifting a car is a more involved process than buying someone a nice dinner.
Gifting cars can be a complicated process, which is why the
car insurance
comparison and broker app
Jerry
has compiled everything you need to know about giving a car as a gift in Montana. In this article, we’ll cover the steps you need to take and the biggest mistakes to avoid. 
MORE: What to do after buying a new car 
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How to buy a car as a gift in Montana

Transferring a title and updating your registration can be a pain, so the best way to gift a car is to bring the recipient to the dealership and buy the vehicle for them. 
Buying the car with the recipient means you can get everything done right away instead of purchasing the car in your name, registering it in your name, and securing insurance in your name—then transferring everything to the recipient later. 
Plus, you aren’t even allowed to transfer the title of a car with an outstanding loan—you’d need to pay it off first. So if you make the gift recipient part of the car-buying process, the whole situation will go much smoother. Everything can be placed directly under the recipient's name, cutting out the need for piles of paperwork and several trips to the DMV.
Key Takeaway The easiest way to gift a car is to bring the recipient to the dealership, have everything registered directly under their name, and put down the money for them. 

How to gift a used car in Montana

No matter how you go about it, gifting a car is a big deal and an extremely generous gesture. If you want to surprise someone with a new car, you’ll need to buy it in your name and transfer it to your intended recipient after the big reveal. 
But if you’ve owned the car for a while and it’s paid off, gifting someone a car (and keeping it a surprise until you do) becomes a bit easier. Follow these steps to gift your car in Montana.

Understand the costs and fees

Remember that owning a car is expensive—even if the vehicle’s paid off. Considering the cost of gas, maintenance, and insurance, cars cost thousands of dollars every year to keep road-ready. So make sure your recipient is financially prepared to own a car before you give it to them. 
It’s also worth noting that you’ll need to pay the various processing and transfer fees to officially transfer the car to a new owner. That said, the only fee you’ll need to pay in Montana is a $10 or $12 title transfer fee (depending on the size of the car). 
Luckily, Montana does not have a gift tax, so you should be able to pass along the car without any problems. But if the value of the gift is over $15,000, you’ll need to report it to the IRS.

Write a bill of sale

The state of Montana considers gifting a car to be the same as selling it. That means you’ll need a bill of sale to legally hand off the car. While it may not seem like a big deal, holding onto a record of the gift could come in handy if you ever find yourself in trouble with the IRS.
That said, all you need to do is fill out this
bill of sale document
with the correct information, and $0 in the amount received section.

Transfer the vehicle title

Finally, you must transfer the vehicle title to the recipient to officially gift the car. Without this step, you’ll still be legally responsible for the vehicle.
To complete this step, work together with the recipient to fill out the
Application for Certificate of Title for a Motor Vehicle
form. The form only requires basic information, and you should be able to quickly complete it without any major issues. Once it’s done, you’ll also need to sign a
Release of Security Interest or Lien
form to assure the DMV that your gift is paid off. When you’ve filled everything out, submit the forms to the DMV along with any required fees.

Purchase the required car insurance coverage

In the U.S., almost every state mandates that car owners carry a minimum amount of car insurance before registering their vehicle. So you or the gift recipient will need to secure an insurance policy that meets
Montana’s requirements
before hitting the road. 
MORE: Car inspection in Montana

How to find affordable car insurance in Montana

Whether you’re planning to buy a car insurance policy for your giftee or let them buy it themselves, you can make the process as fast and easy as possible with
Jerry
A licensed broker, the Jerry app helps users compare personalized quotes from over 50 top providers like Progressive, Nationwide, and Allstate for free. When you find a plan you like, Jerry can help you buy insurance straight through the app.
When your policy comes up for renewal, Jerry will even send a new quote to your phone, so you know you're still getting the best available rate. Users save an average of $887 a year on car insurance with Jerry—and it only takes a minute to sign up.
“I’m buying a new car, and all the quotes I got previously were insane.
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FAQs

In short, no. Montana does not have any state-required tax. But if the value of your gift exceeds $15,000, you’ll need to report it to the IRS for federal tax purposes.
Montana has a gifting process in place for a reason. That said, it’s best to follow the proper gifting procedure. Trying to find loopholes may be easier, but it isn’t worth it in the long run. Plus, the gifting and selling processes are nearly identical in Montana, so you may as well gift it as the state recommends.
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