If you’ve got the vehicle title in hand, you can gift a car in North Carolina by filling out title transfer forms and paying applicable taxes and fees.

Written by Samuel Todd

Edited by Melanie Krieps Mergen

Updated on Apr 17, 2024

Table of Contents

How to buy a car as a gift in North Carolina
How to gift a used car in North Carolina
FAQs

Gifting a car in

North Carolina

doesn’t always come with vehicle taxes, but you will have to go through the process of transferring the car’s title, which includes some fees.

Vehicles gifted from a spouse, parent, or stepparent are exempt from highway use tax in North Carolina
Transferring a vehicle title to a new owner involves filling out several forms and paying applicable taxes and fees
A certificate of title fee in North Carolina is $56

How to buy a car as a gift in North Carolina

If you’re giving away a new car, you’ll want to get the giftee involved as soon as possible by bringing them into the dealership.

This is because you need to have the car title in hand before transferring the car to your friend or family member. If you’re buying it up front, it’s no problem—you can hand over the title right away.

On the other hand, if you need a little help from financing to buy the car, you’ll want to include the recipient from the get-go. That way, you can guarantee that they won’t hit any legal or financial roadblocks down the line.

Key Takeaway You need to have the car title in hand before you can gift a car in North Carolina—so it’s best to bring the recipient into the dealership and sort out the financing together.

How to gift a used car in North Carolina

As long as there are no outstanding loans on the car, you can transfer the title of a car you already own. These are the main steps involved in the North Carolina title transfer process.

1. Negotiate the terms of the gift with your recipient

Both you and your recipient should be on the same page when it comes to the terms of your gift.

North Carolina

, these are the key costs to discuss with your recipient before you transfer ownership with the Department of Motor Vehicles:

A $56 certificate of title

A $20 vehicle plate transfer

A highway use tax that’s equal to 3% of the car’s sales price (unless you’re giving the car to certain family members)

Long-term costs, like insurance, maintenance, and fuel

Key Takeaway The last thing you want is to give a car to someone only for them to be ambushed by its long-term financial expenses. Discussing finances beforehand can help to prevent any awkward misunderstandings.

2. Record the gift with a bill of sale

It might seem odd that you need

a bill of sale

when nothing is being sold and no money is trading hands. In this case, it’s better to think of the bill of sale as proof that you intended to give the car away.

All you need to do is write $0 in the “price” section of the bill, which indicates that you’re giving it as a gift. Make sure that you and the recipient both sign the bill of sale so that you don’t run into any legal snafus down the road.

3. Transfer the vehicle title

Transferring the title is the most important part of all. This is how the car will officially change hands—so it’s important to do it right!

These are the steps:

Both vehicle owner and giftee should head to a North Carolina Division of Motor Vehicles (NC DMV) office

Provide North Carolina driver’s license and proof of insurance

Make sure all property taxes are paid

Bring the vehicle title and show that there are no outstanding liens

If the vehicle title still lists a lien, bring a lien release letter from the lienholder

Complete a

Title Application

(form MVR-1),

Odometer Disclosure Statement

(form MVR-180), and

Damage Disclosure Statement

(form MVR-181)

Complete the transfer information on the back of the title (must be notarized)

Complete a

Highway-Use Tax Exemption Certificate

(form MVR-613), if the car is being transferred between spouses, a parent and a child, or a stepparent and a stepchild

Pay the title transfer fee

Applicable title and registration fees can be found on the

NCDOT website

If you don’t have the original title: You’ll need to

request a duplicate title

before you can proceed. Your new title should arrive within 10 to 15 days.

If the vehicle title is an out-of-state title: The North Carolina DMV office will reference that state’s requirements.

Keep in mind: You might need to go through a

car inspection

and pass an emissions test within a few months of the title transfer so you can move forward with vehicle registration.

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4. Purchase North Carolina liability insurance—or full coverage

In the state of North Carolina,

liability coverage

is required by law. Full-coverage auto insurance is also a good idea for most drivers.

Compare quotes from at least three car insurance companies to find the best rate for you or your family member.

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FAQs

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

If your car is a gift from your spouse, parent, or stepparent, you can have the 3% highway use tax—the sales tax that applies to all vehicle purchases—waived. Otherwise, you might still need to pay a few taxes and minor fees.

Is it better to gift a car or sell it for $1 in North Carolina?

Though it’s possible to sell your car for $1, we wouldn’t recommend it: it often takes more work than simply gifting the car and rarely saves you money. On top of that, the contract wouldn’t be based on the fair market value of the car, so it might not be legally valid.

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