• In New Jersey, no taxes are levied on the gift giver and receiver if a car is given as a gift, unlike the situation where it is sold for a price.
• Both the gift giver and the gift receiver have to visit the New Jersey Department of Motor Vehicles (NJDMV) for the transfer process.
• In the purchase price section of the bill of sale, write ‘gift’, and not a price.
• There is a title transfer fee of $60 even if the car is given as a gift.

Gifting a car is not as easy as gifting a bouquet or even the latest gadget in trend. Since using a car involves many legalities, including transfer of ownership title, certain processes need to be followed while gifting a vehicle to someone. So, if you are a resident of New Jersey who wants to give an NJ-registered car as a gift to someone, follow these processes to have a trouble-free post-sales experience for both you and the receiver.

Step 1: A Preliminary Check

Ensure The Car Is In a Good Condition

A thorough inspection of the car is avoidable if you are scrapping it, however, if you are gifting it to someone, it is better to ensure that it is in go od condition, with all of its controls and panels in proper condition and functionality.

Following are some of the things that you should check in your car before handing it to someone else forever:

• Fluid levels
• Body line damages
• Wear and tear of interior panels
• Tire pressure levels
• Functionality of all electrical components
• Feedback of brakes

Ensure all these things are in good shape – you wouldn’t want to expect curses instead of thankfulness!

Verification Of Current Ownership

Before changing the ownership title of your car to the name of the person to whom you are gifting it, ensure that its current ownership title is in your name with no discrepancies and dues. Here are the things to check and ensure that the vehicle you wish to gift is wholly in your name:

• Check whether all the dues to the lienholder, from whom you took a loan (if any) while buying the car and keeping it as collateral, are cleared. The lienholder’s name has to be removed from the title certificate after all the dues are cleared.
• If the original owner or co-owner of the car is deceased, an order from the probate court with a clarification using a death certificate is required.
• If the original title certificate is lost, you can issue a copy from the Department of Motor Vehicles of New Jersey.

Negotiation Of Terms For Future Expenses

Usually, the current owner of a car takes care of all the expenses during its ownership, including maintenance, repairs, and insurance renewal costs. Before gifting your vehicle to someone, discuss with the gift’s recipient and ensure you are clear about who will bear the vehicle ownership costs with the recipient. There should also be discussions about who will pay all the fees and taxes during the transfer.

Step 2: Initiation Of Paperwork

Making A Bill Of Sale

It is advisable to create a sales agreement or a bill of sale to be exempted from all possible responsibilities and ownership expenses of the car you wish to give as a gift.

• The bill of sale format is available online and at the New Jersey Department of Motor Vehicles.
• Both parties involved – the gift giver and the gift receiver – should visit the New Jersey Department of Motor Vehicles (NJDMV) for the transfer process. Once you are at the NJMVD, a clerk can help you fill out the form.
• Along with the names of the current vehicle owner and gift recipient, you should also mention the date of transfer and odometer reading of the car on the sale letter.
• Fill out the form with all the required information, including details from the original title certificate, driver’s license, and particular personal details of both parties.
• In the purchase price section of the form, write ‘gift’. It will benefit the gift recipient with tax exemption generally levied during the transfer.
• Other documents that have to be brought during the transfer process are the original title certificate, insurance, and smog check.

Endorsement In Insurance

Besides the title certificate, the change of ownership has to be mentioned on the insurance letter as well. The insurance company of the gift recipient will issue a revised letter of insurance with the owner’s name changed based on the documents and bill of sale submitted at the New Jersey Department of Motor Vehicles.

Filling The Gift Transfer Form

The last step of all the paperwork is an Affidavit of Motor Vehicle Gift Transfer Form signed by both parties. Available online and through the New Jersey Department of Motor Vehicles, this form requires some personal information of both parties, including their contact details and the relationship between the giver and receiver of the gift. 

Step 3: The Handover

Submission Of All Forms With Fees

Once you and the gift receiver have filled out all the required forms and updated documents, the gift receiver shall submit them and the required fees to the New Jersey Department of Motor Vehicles. Apart from the title transfer fee of $60, there is an additional charge of $4.50 if the existing registration certificate is up-to-date or up to $150 if it isn’t.

Verification Of Registration Of Car In The New Owner’s Name

Once the fees and documents are submitted, the gift recipient becomes the new owner and is liable for obtaining the revised title certificate and insurance from the New Jersey Department of Motor Vehicles.

• Usually, the updated documents are delivered to the new owner within a couple of weeks, who should cross-verify all the details printed on the documents for errors.
• If there is even a minor mistake, the new owner should notify the New Jersey Department of Motor Vehicles, which will require an application for a correction.

Can You Gift A New Car In New Jersey?

Simple answer – Yes, of course. However, unlike the case of an old car as a gift, gifting a new car to someone is much less of a hassle.

You can gift a brand-new car by bringing the gift receiver to the new car dealership and involving him in the required paperwork. There are two different purchasing modes of buying a new car – on cash or loan.

On cash

If you want the new car registered in the gift receiver’s name, you need to pay the required amount for the vehicle at the dealership and ask the gift receiver to submit his or her documents so that the car is registered in his or her name.

On loan

If you want to buy a new vehicle on loan but still want to make the gift receiver an owner, you can make him the co-owner of the car. In this case, you can take the full monetary responsibility and make the gift receiver a co-owner by submitting the required documents and attaching his or her name to the title and registration.