Your kid just graduated from an engineering school? Thinking of a gift that could make up for the extensive stress they had to go through during college? Well, nothing can be a better gift for them than a vehicle of their choice!
Gifting a car sounds exceptionally pleasing, but it is associated with a lot of legal processes. When you are gifting a vehicle, you have to purchase it in your name first and transfer the ownership title to the recipient. The process of transferring the ownership title of a vehicle is complicated.
Thinking of gifting your loved one a motor vehicle to celebrate their big success? Well, it is time that you start working for the transfer of the ownership title. It is a lengthy process, and you should adopt a step-by-step approach!
The Process of Gifting a Car in Texas
Here is a step-by-step guide that will help you get things right in the first go, making the process of gifting a car easy, simple, and in compliance with Texas Laws for gifting a vehicle!
Step 1: Purchase a Vehicle
The first step is to purchase the perfect vehicle. You can choose a private seller or dealership, according to what suits you better. To make the right choice, you need to consider the needs of your kid. Whether you want to buy a car or a motorcycle for your loved one, you need to choose the one that best suits their lifestyle. It is an essential consideration when gifting a motor vehicle to your loved one.
If your budget does not allow you to buy a brand-new car, a new, used car is also a great option.
You need to make sure that you complete the purchase process legally as it will create problems during the process of transferring the ownership title.
Step 2: Check the Odometer
Now for the transfer of vehicle title, you must begin by checking and recording the odometer reading. The title of the vehicle must contain the reading of the odometer. A title document without the reading is not legal and may lose its authenticity.
Ownership transfers for cars that are less than ten years old require a disclosure statement. It is a necessary document that you will need during the process.
Recording of the odometer reading is essential as it helps in determining the value of the gift tax and is even required when the owner decides to sell it in the future.
Step 3: Signing the Title
The next step of the process is to fill out the Assignment of Title. It is a section of the ownership title, and both the buyer and the new owner are required to fill it out. It is a crucial part of the process and might create problems in the transferring process. Therefore, you and the new owner must fill out the section carefully.
Step 4: Completing the Application for Title
After the vehicle title has been signed to the new owner, the next step is the completion of the Application for Texas Certificate of Title. It requires the involvement of the new owner of the car. The application for Texas title is an important document. You need to include this document with all other paperwork at the time of title transfer.
The document consists of all the essential details of the new owner. If the new car owner qualifies for the Gift Tax, it must be mentioned in this document. According to Texas law, when you gift a used car to your family member, the immediate family members must pay a $10 Gift Tax just like the sales tax.
You may contact your local county tax office to know more about the gift tax on a car.
If you purchased the gift-car in the past but lost the Texas vehicle title, you must apply for Certified Copy of Texas Title immediately.
Step 5: Affidavit of Motor Vehicle Gift Transfer
Another document that is essential for transferring the ownership title of the car is the Affidavit of Motor Vehicle Gift Transfer. The gifting affidavit needs to be filled out by both you and the one receiving the ownership.
The affidavit is an acknowledgment that the title transfer does not involve a monetary exchange between the buyer and the recipient.
Step 6: Liability Insurance
One final document that the recipient of the car will have to provide at the time of title transfer is proof of liability insurance. You must purchase liability insurance according to your needs.
Step 7: Registration of the New Title
The final step requires the recipient to compile all the documents, including title application, odometer statement, signed the title, gifting affidavit, and proof of liability insurance. Visit the nearest office of the tax assessor’s office to complete the process. It is the final step, after which the recipient will become the official owner of the motor vehicle.
Following these seven steps will help you complete the process of ownership title transferring. Make sure you follow all these steps to minimize the time and effort!
Title Transfer Fee
The process of title transfer requires payment of a fee that varies with the state. The basic cost for title application may range from $28 to $33. The inspection fee can go as high as $30.75. However, the inspection station may charge an additional service fee. The maximum amount for the local and county fee is $31.50, while the insurance verification and automation cost $1 each.
The process of transferring the title is very much similar to the process of selling a vehicle. Both scenarios require the transferring of ownership title. If you want the process to move smoothly and in the minimum possible time, it is best that you carefully compile all the documents according to this step-by-step guide!