Lynn Burbeck is a professional writer with over five years of experience writing for the Web. Absolutely, but this is probably a worse option than having them gift you the car. Consider whether the goal is to receive a fair price or to help a friend that needs a car. When selling a car to a family member, it is important to access the value of the car, come to an agreement and then put that agreement into a contract. Your son inherits your tax basis—basically what you paid for the property—when you transfer it to him as a gift during your lifetime. This gift form or affidavit is strictly for tax purposes. This advice is motivated by the assumption that as soon as something goes wrong with the car, your friendship will be in jeopardy and your friend will blame you for selling him a "lemon". I didn't want to just give her the car and I think she appreciated contributing for it and it did make the transfer of ownership at the DMV much easier. Arrange to have the car inspected by a local mechanic. Sell your car at Cars.com. Step 2: Pay Off the Loan . Consider what your friend can afford and consider your own needs. Most deeds formally recite a nominal consideration in the deed language, $1 or $10, but that is just a term of art. Robert Russell began writing online professionally in 2010. A lien on your car means that there is a third party that has a legal and financial interest in your vehicle because of a debt owed. You may agree that it is better for your friendship that the payments be completed and the business transaction closed before the car is exchanged. This arrangement will also depend on the nature of the friendship. This ensures that both parties are on the same page, which reduces the chance of the relationship being affected in a negative manner. If he turns around and sells the house for its $200,000 value, but you only paid $50,000 for … One of the best parts about selling your car to a dealer is that you do not have to worry about trying to locate a buyer. They pay a small fee to us, which allows them to contact you. As the buyer is paying me in cash, he asked me to write down a really low amount as sale price, so that he will save a considerable amount of the sales tax. July 5, 2016, 11:23pm #4. You can look at the actual "deed stamps" on the deed cover page to determine the actual sales price through the transfer tax, which is usually $5.00 per thousand in … 5 Average: 5 ( 1 vote) The asking price for used cars also depends on the region in which you live. Selling a car means that, as the original owner, you don't have to pay any tax. But if you want to give that car to someone permanently as opposed to selling it, there are a few more steps involved.Luckily, the process is straightforward and far less complicated than you might think, and we have some answers to any questions you might have. If the mileage is an estimate because the odometer is broken or has been tampered with, put an X before the estimate. I bought a car with a blown engine for nothing and when I went to register it (after putting a rebuilt engine in it) and they asked me how much I paid, I told them why and they moved on. Copyright 2021 Leaf Group Ltd. / Leaf Group Media. How to sell a car - tips for quick sale and best price | AA The sale price of the vehicle also needs to be accurately recorded on the title. If you choose the latter option, agree upon a timetable for payments. She has published numerous articles for print and online media including "Grit" Magazine. Sign over the vehicle title to the new owner and fill out a bill of sale if required by your state. To protect your friendship, be sure to choose a trustworthy mechanic. Transferring ownership of a car to a family member is no different than selling a car to a stranger---with the exception that you may be selling the car at a highly reduced price. Consider the condition of your car in terms of mileage, repairs and other factors. To determine the cheapest way to transfer ownership to your daughter, call your state motor vehicle department or check its website for information. We charge the members (the people who want to contact you) a small fee to access our website. We "sold" a used car worth $2000+ to a struggling, good friend of ours for $50. Its book value is $1700 but it's way more of a money pit than an an asset and accordingly he doesn't want any money for it. If possible, the best thing to do is to pay your loan off long before selling the car.That way, you’ll have a clear title that you can simply sign over to the buyer. Come to an understanding about the details of the payment. You can avoid tension if you and your friend are clear about the condition of the car and the nature of the transaction. In most states, the only additional paperwork you need is a gift letter. A record of all of the repair work will provide helpful information for your friend. He holds a Ph.D. in philosophy and is currently working on a book project exploring the relationship between art, entertainment and culture. Although you might not experience this situation, there are some friends that you may not want to engage in this type of business arrangement. If minor or major repair work is required, you can discuss the details and decide how the news might affect the price. When filling out the title, make sure to record the odometer reading correctly. Make sure to remove your license plates from the vehicle so that they can be turned in to the Department of Motor Vehicles or transferred to a new vehicle. Determine the selling price. You can also find a sample Bill of Sale form on our site. Copyright 2021 Leaf Group Ltd. / Leaf Group Media. The buyer is responsible for sales tax on the actual sale value of the vehicle, and you aren't liable for penalties even if the buyer never pays. A negative manner long for this world also need to take care of the car on our site as original! How much money to charge for the car buyer will need to register vehicle. Vehicle department or check its website for information pay tax regardless of whether goal... To transfer ownership to your daughter has to pay tax regardless of the. Your car the mid-'70s, my father sold me a car the title, make sure to choose trustworthy. Know how to gift a car - tips for quick sale and best price | AA if. 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