Gifting a car to a family member is great for two people. It helps you to get rid of a car you don’t want, and it helps a relative out at the same time. In Rhode Island, you must inform the Department of Motor Vehicles – Rhode Island (DMV-RI) of the transfer. All vehicles in Rhode Island must have an identifiable owner. As your Mazda dealer, we’d like to tell you about some of the things you need to know about gifting.
Gifting Requires Paperwork
When you sell a car, you need to complete a bill of sale, the certificate of title, and an odometer disclosure statement. When you gift a car, you have to complete the same paperwork and several additional forms. The reason for this paperwork is that you’re transferring ownership of the car to someone else, and the DMV-Ri must have the updated information for their records.
You fill in the certificate of title and the bill of sale as the seller, and your family member completes the form as the buyer. You’ll need to mark the purchase price as “Gift”. You might also need to complete a certificate of inspection unless you’re gifting the car to your spouse or one of your children.
Not Everyone Is a Family Member
The DMV-RI has strict requirements for who is considered a family member when you’re gifting a car. Their list includes:
- Spouses
- Parents/Step Parents
- Grandparents
- Grandchildren
- Children, including stepchildren and adopted children
- Siblings, including half-siblings
- In-laws (including mother, father, son, and daughter)
Anyone not on this list uses the procedure for gifting to a non-family member. When you gift a car to a family member, they don’t have to pay the 7% Excise Tax for transferring a car.
You Have to Return the License Plates
Once you and your family member have completed the necessary paperwork, you’ll need to remove the license plates. You should accompany your family member to the closest DMV-RI office. Once there you’ll need to surrender the license plates to the DMV-RI. They will issue a new set of plates to your family member that can be attached to the car.
There are two exceptions to this rule. The first involves a car becoming the joint property of a partner and child or two spouses when it was previously owned by one of the parties only. The second exception involves a car that was the joint property of two family members being transferred to one of the family members only.
If you’d like to know more about gifting, or you’re looking for a great replacement for the car you gifted, come and see us at Flood Mazda.
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