How to Gift a Vehicle in Connecticut: A Comprehensive Guide

Giving a car to someone as a gift can be a meaningful way to help out – be it a family member in need of reliable transportation or a friend embarking on a new phase in life. If you want to gift a vehicle in the state of Connecticut, it’s important to get familiar with the legal and administrative steps necessary to make the process go smoothly. In this guide, we’ll walk you through all the key points you need to know about how to gift a vehicle in Connecticut, including transferring ownership and dealing with taxes – so you can get your gifting done quickly and easily.

What Does “Gifting a Vehicle” Mean?

To gift a vehicle means that you transfer ownership of a car (truck, SUV, motorcycle, or RV) and do not receive payment for it. Where a gifted vehicle transfer differs from a conventional sale lies mostly with the types of documents used, and occasionally, tax exemptions – particularly when the car if being gifted to a family member.

How to Gift a Vehicle in Connecticut: A Step-By-Step Guide

Step 1: Gather Required Documents

Before you get started with the process of transferring a car as a gift, make sure you have all your paperwork ready. You will need the following:

• The original certificate of title (signed over by the current owner)
• A bill of sale (even if there is no money exchanged)
• Valid state ID
• Proof of insurance for the recipient
• A completed Form H-13B
• A completed Form AU-463

Having these documents prepared in advance will help avoid delays when you visit the DMV.

Step 2: Sign Over the Title

The most important piece of gifting a car is transferring the title accurately. The current owner (the person giving the gift) will need to:

• Sign their name in the designated seller section of the title – as the Seller
• Fill in the recipient’s name as the new owner – as the Buyer
• Enter the current odometer reading (if applicable)
• Declare the sale price as “gift” or $0

It’s important to be cautious when filling out the title – errors or cross-outs will render the document defaced and will then require that you order a replacement.

Transfer of Vehicle Ownership in Connecticut

Step 3: Create a Bill of Sale

While no money is being exchanged during a gift transaction, Connecticut usually asks for a bill of sale regardless. This document should have the following details listed:

• Names and addresses of both gifter (seller) and recipient (buyer)
• Vehicle information (make, model, year, and VIN)
• Declaration that the vehicle is a gift
• Date of gift

This helps establish a clear record of the transaction.

Step 4: Determine Taxes

When gifting a vehicle, it’s important to know that taxes will be handled differently depending on who is receiving the vehicle as a gift. Meaning, if the car is going to a family member or a non-family member.

How to gift a car to a family member:
If your vehicle is being gifted to an immediate family member (like a a spouse, parent, or child), the recipient may be exempt from paying sales tax. The giftee will need to fill in form AU-463 to claim this exemption, and then submit it during registration.

How to gift a car to a non-family member:
The process of gifting a car to a non-family member in Connecticut is similar, but the recipient may need to pay sales tax to the state depending on the vehicle’s fair market value. Yes, even though the car is a gift.

It’s generally a good idea to get familiar with any eligibility for tax exemptions before beginning the transfer. This way everyone involved knows what to expect.

Step 5: Register the Vehicle

After the title is signed over and all documents are completed, the receiver of the vehicle must register the vehicle in their name. This means:

• Submitting all documents to the DMV
• Paying registration fees
• Providing proof of insurance
• Paying any taxes (if applicable)

In order to legally drive a vehicle in the state of Connecticut, it must be registered. So it’s a smart move to get registration done right after (or along with) the title transfer.

Step 6: Cancel or Transfer Plates and Insurance

Once the vehicle has been gifted, the former owner should:

• Remove license plates (they belong to the owner, not the vehicle)
• Cancel or transfer any insurance
• Notify the DMV if required

Common Mistakes to Avoid When Gifting a Vehicle

When gifting a vehicle to a friend or family member in the state of Connecticut, it’s important to look out for common errors:

• Filling out the title incorrectly: Mistakes will require a duplicate title and cause delays
• Forgetting the bill of sale: Even with no money exchanged, documentation is necessary
• Assuming there won’t be tax: Tax exemption depends on the relationship of gifter and recipient
• Waiting to register: Delaying registration can end up in penalties

FAQs

Can you gift a car with a lien on it?

No. Any outstanding payments must be completed before gifting a vehicle.

Can you drive a gifted car before it’s registered?

A gifted car is like any other – it must be registered in order to be driven legally. To drive without registration can end up in fines and possible license suspension.

How do you register a gifted vehicle in Connecticut?

The process of registering a gifted vehicle is nearly identical to a purchase car. You will need to bring all your transfer documents, ID, and proof of insurance to the DMV. For an overview of registration requirements, check here.

 Final Thoughts

Gifting a vehicle is a great way to help support a loved one or charity. Knowing how to get the process done beforehand makes everything go smoother. And remember, when it’s time to renew your registration down the line, at eTags, we’re here to help!

Renew your Connecticut Registration here.