Gifting a Car in North Dakota
If you have the vehicle title in hand, you can gift a car in North Dakota by completing a bill of sale, transferring the title, and paying any fees and taxes.
Written by Samuel Todd
Reviewed by Kathleen Flear
To gift a car in North Dakota, you’ll need to complete a handful of forms, transfer the car's title to the recipient, and pay nominal fees.
There are few gestures of generosity more powerful than gifting a car. Whether you’re giving it to your teen as a rite of passage or donating a used car to a neighbor, it’s sure to make a life-long impression. Unfortunately, gifting a car isn’t as easy as giving someone a new jacket or phone. Each state has unique laws around gifting a vehicle, and North Dakota is no exception.
The process of giving your car away doesn’t have to be overwhelming, though.
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How to buy a car as a gift in North Dakota
If you have your heart set on giving away a brand-new car, you should bring the giftee with you to the dealership. Not only will this ensure that they get the car of their dreams, but it’ll also help you with the financing and title transfer of the car.
You’ll need to make sure the vehicle has no outstanding loans before you can transfer its title to the giftee. If you can afford to buy the car outright, then you should have no problem—but if you’re going to finance it, you should work together with your friend or family member.
Even though you might not be able to surprise them with the car, you’ll protect them from any unwelcome legal surprises down the road!
Key Takeaway You’ll need to make sure that there are no outstanding loans on a new car before you can give it away—so it’s best to bring the recipient with you to the dealership and work together on the financing.
MORE: How to buy a new car
How to gift a used car in North Dakota
On the flip side, you can transfer the title of a car you already own, so the process is more straightforward if you’re handing a vehicle down to your son or daughter (or a super friendly neighbor!). Once you’ve double-checked that there are no existing loans on the vehicle, you're all set.
Whether you’re a subtle gift-giver or you’re planning trumpets and fanfare around your gift, you’ll need to adhere to North Dakota’s rules. We’ll give you a run-down of what you can expect.
Negotiate the terms of the gift with your recipient
After the thrill of the moment has died down, you and the recipient should sit down to review the terms of your gift. In North Dakota, the transfer fee is only $5, but you also need to consider long-term costs like maintenance, insurance, and fuel.
You wouldn’t want your friend or family member to ride off into the sunset with their new car, only to be weighed down by its expenses in the long run!
MORE: 8 easy tricks for saving money on car insurance
Record the gift with a bill of sale
Even though you aren’t technically selling the car, you’ll still need a bill of sale to prove that you gave the car away.
Just fill in $0 for the “price” section of the bill to confirm that you’re giving the car for free. Keep in mind that you and the recipient should both sign it—that way, you won’t face any legal hurdles down the road.
Transfer the vehicle title
Now, the moment you’ve been waiting for: transferring the car title. It’s the most important part of the whole process because it marks the actual moment that the car changes hands.
Here’s our step-by-step walkthrough of transferring title in North Dakota:
- Head to a North Dakota DOT office (both the owner and the giftee!)
- Bring an ID, proof of insurance, and your bill of sale
- If the vehicle is less than 9 years old, complete aDamage Disclosure Statement
- If the vehicle is less than 10 years old, you’ll need to provide an odometer reading
- Pay the $5 title transfer fee, registration fee, and potentially an excise tax
Now, pat yourself on the back! You’ve successfully transferred the title of the car, which is no small feat. As a heads up, you might need to go through a car inspection and pass an emissions test within a few months of the title transfer.
At long last, it’s time for the final step in the car-gifting process: getting the perfect insurance.
Purchase North Dakota liability insurance—or full coverage
North Dakota law requires that you get
liability coverage
, which protects other drivers if you ever cause an accident. If you want top-notch protection on the streets, though, you should probably go for full-coverage insurance too.Once your insurance is up to snuff, your friend or family member is free to tour the streets of Fargo or take a road trip to the coast in their new car.
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How to find affordable car insurance in North Dakota
There’s no better way to complement a wonderful gifted car than by pairing it with the perfect insurance. If you’re sick of filling out forms, car insurance shopping genie
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FAQs
Do you have to pay taxes on a gifted car in North Dakota?
If the gifted car is being transferred between spouses, a parent and child, or brothers and sisters, there is no excise tax. Otherwise, North Dakota requires a 5% excise tax on gifted vehicles.
Is it better to gift a car or sell it for $1 in North Dakota?
Generally, it’s better to gift a car than sell it. Though you can sell a car for $1 in North Dakota, you probably won’t save much time on paperwork and the fees will be similar—so we’d recommend sticking to the official gifting process.
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