How to give her the old car?

Parent Cafe
1

<p>I bought a new car today. I kept my old car - didn’t trade it. Bought it new 10 years ago, have had all the maintenence done religiously, it has 100,000 miles on it, it’s in good condition, except for the fact that it’s old, and also the AC doesn’t work any more (expensive to repair) plus the transmission is beginning to miss, and it’s a make and model where the transmissions are reputed to mess up when they get this many miles.</p>

<p>Anyway, my thinking was I would give it to D - she could have it as a first car I reasoned. So at the dealership I made them order new tags for the new car rather than transfering my tags, and told them I was going to transfer title to my old car.</p>

<p>They warned me that if I simply “give” it to her, she has to pay state sales tax, gift tax, pay for new tags, and a whole bunch of other fees. They said it would be better to put both of our names on the title. However, if I do that, then, if there should be an accident, I’m financially liable too if my name is on the title, right? </p>

<p>I thought this would be a simple matter of changing the title. D doesn’t know yet, I’m not going to tell her until I figure this out. </p>

<p>How exactly do you give your child a car?</p>

2

<p>Sell it to her for a dollar if you really want to “give” it to her.</p>

<p>Also, if she is on your insurance, your name (or whoevers name the policy is under) has to be on the title. (At least in my state)</p>

3

<p>You are describing two problems. Liability & Cost of ownership. How old is your daughter? What type of umbrella do you carry for liability?</p>

4

<p>Hmmm, sorry, I don’t understand. D is not on my insurance, because she does not own a car and does not drive. She is a licensed driver. </p>

<p>I have no idea what my insurance covers in terms of umbrellas. What is an umbrella? All I know is that I have full coverage…</p>

5

<p>Fendergirl, I think I understand - you mean that if I sell it to her for $1, she doesn’t have to pay “gift” tax?</p>

6

<p>We did this last summer with our 23 yo S who is in grad school in a different state (2000 miles away). We drove the car there, showed up at a state DMV office with him, told them we were gifting the car to him. Registered the car in his name. No transfer taxes, no gift tax (under the limit of $20,000 - 2 parents can gift 10,000 each without gift tax kicking in for them), no state sales tax (in either state), just the regular annual registration fee charged by that state. He got the new state’s plates right on the spot. Got his own insurance, and he’s on his way.</p>

<p>Call the DMV(s) of the state(s) involved to find out exactly what is required to accomplish your task.</p>

7

<p>Unless you are saying that your D has NEVER driven one of your cars, she actually is on your insurance. Your policy covers your vehicles - not really any person - and as long as she had your permission, she was covered while driving your car.</p>

<p>If your D is between 16-24 yrs. old, it would be MUCH cheaper to keep the car titled in your name and insure it on your policy, as opposed to her getting her own policy on her own car. Consider having her repay you for her part of your annual premium?</p>

<p>Have her pay you $1.00 for the car if you want to sell it to her - that way she pays only a few cents in sales tax. Gift tax does not apply in my state. She will still have to pay for new plates, titling fees, etc., no matter how much you charge her for the car.</p>

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<p>In our state, when you sell a car, the sales form that is presented to change title must report the selling price for sales tax purposes, which are paid by the buyer. If the selling price is significantly less than blue book, the state will impose the tax based on blue book. None of this $1 stuff. Call your DMV. Our state department of revenue has a form to fill out when gifting to a close relative. The state sales tax does not apply to the gifting scenerio and the completed gifting form is presented to the DMV instead of a sales form.</p>

9

<p>When my S started driving our cars, our insurance co. told us that he explicitly needed to be added to our policies (which involved additional premium cost). He would have been welcome to “occasionally” drive our car, as would, say, my brother visiting from out of state, and still be covered without being explicitly named on our policy. But if my S had an accident in our car, and it was discovered that he in fact drove it regularly, we would be in a heap o’ trouble. </p>

<p>My understanding is, if someone is a regular driver (or <em>the</em> regular driver) of a car, their name has to be on the insurance policy as one of the licensed drivers responsible for that car. YMMV. (And I might be full of beans, but I kinda doubt it.)</p>

10

<p>Absolutely right. When my D turned 17 and got her license, even though we did not buy her a car, and she only drove mine or H’s whenever available, we were advised to add her to the policy.
We have friends who follow the “don’t ask, don’t tell” style, but I would not risk that. God forbid she should be in a major accident, and uninsured.</p>

11

<p>I see that I will have to call the DMV. It doesn’t make any sense to get the title into her name if she would have to pay taxes and fees. </p>

<p>I never allowed her to drive my car - she’s very smart, but around age 16-17 a total ditz behind the wheel. Her high school didn’t have driver’s ed, so I hired a private driving school (because trying to teach her myself was a total disaster), but, even once she passed the course and got her license, she made terrible decisions - chose the gas when the brakes would be appropriate, thought a red light was a suggestion, etc. I assumed it was a matter of emotional maturity etc., and, since she goes to college in a very large city with lots of public transportation she hasn’t needed a car, so I thought it best not to encourage or provide one. It’s time though now for her to have a car, and so this is a good “starter” car - she can tool around in it and get some experience. </p>

<p>I talked to my insurance company last week and thankfully the numbers to add her to the policy on the old car aren’t bad, but no way am I letting her drive my new car.</p>

<p>Beachy, I have no idea at all what our state law says about this. I always thought insurance was specific to person and car.</p>

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<p>Thanks to everyone who answered, I appreciate it.</p>

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<p>Why would you give a car to a child you describe as a “total ditz?”</p>

<p>She needs way more practice, it sounds like, before she’s safe. Sell the car and use it to pay for more lessons.</p>

14

<p>our insurance requires all liscensed drivers in household to be covered on all cars
I agree with dmd- if my daughter was a total ditz I sure wouldn’t be giving her a car- I would make sure that she was on insurance and then I would make sure she had lots of practice with adults in the car-
howabout a family road trip?
freeways are generally pretty safe ( if you stay away from the truckers and closing time) and she can get some miles in.</p>

15

<p>dmd, that was when she was 16-17. She’s now a junior in college.</p>

<p>I firmly believe that there are simply some (not all - but some) teens who have absolutely no business driving, and, in my opinion, my D was one of them.</p>

16

<p>Okay, I missed that she’s now a junior. But are you sure she’s had enough practice? You say she hasn’t been driving much.</p>

17

<ol>
<li><p>1 parent can gift $10,000 PER YEAR without gift tax kicking in–IRS</p></li>
<li><p>Call your insurance agent and ask for the least expensive option; ie she owns it, you own it. They do appreciate the honesty.</p></li>
<li><p>Does the car have dual airbags? Just asking.</p></li>
<li><p>Cars are maturation accelerants, IMHO. Access to a car makes a kid act responsibly–90% of the time. That’s my observation and I am sticking to it. </p></li>
<li><p>Yes, new drivers are not as competant as experienced drivers but that is not a reason to keep them wrapped in cotton wool. Let them get out there and sort it for themselves.</p></li>
</ol>

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<p>This summer she’ll have some time to get used to it. And, this is a great “starter” car that I’ve kept in excellent mechanical condition - it’s a Ford Taurus, very safe, air bags, easy to drive, and, she can tool around in it, get used to driving, and then once she has experience she can move on to something newer.</p>

19

<p>Cheers, you simply don’t understand. At 16-17 my D was a total space cadet. Outstanding student and athlete but it all sorta stopped there. Just because the state says a person can have a license at age 16 doesn’t mean that all 16 year olds are ready to drive. My cummulative experience and judgment was that this one was not ready to drive, and so that was my decision, and I absolutely, firmly stand by it. I’m not making judgments about 16 year olds in general, but I absolutely will make those judgments about my D. It’s not a matter of wrapping her up in cotton wool or silk or even a straitjacket, it’s a matter of consideration for her safety, the safety of other drivers, and my financial liability, stacked up against the total absence of any need for her to drive. </p>

<p>Then, once in college, she still had absolutely no need to drive anywhere - very close to metros, etc., plus the team buses transport her everywhere, even to the airport. Plus, on-campus parking fees are outrageous, so it simply didn’t make sense to make any effort to provide a car. </p>

<p>She still doesn’t really need one - I simply now own an extra car that I do not need; I didn’t even ask about the trade in value because I just know that it’s to our financial advantage if I keep it rather than trade it in. But it would benefit her to have a car now, so she can start driving and get some experience.</p>

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<p>LTS, I’m on your side about the early driving, even though my d. is totally different. She had her license the day after her 16th birthday (would have been sooner, but birthday fell on a Sunday) - that week, driving my old car, my radiator cracked and the car overheated – so while my car was still in the shop I went out and bought her a new-er used car, one that I thought would be more reliable – and she was on her own and driving all over right away. I let her have the newer car because the one thing I was worried about was her safety – it scared the dickens out of me to think of her being stranded on the roadside alone needing to flag down help – and I just didn’t trust my older car. I am absolutely anal about maintenance on the car she drives. </p>

<p>But you are right, all kids are different, and I have an older son who was rather scary behind the wheel. He flunked the driving test twice - and when he got his license I would let him drive the car around town (meaning the burb where we live) only occasionally for errands - but he didn’t have it regularly and it was a long time before I let him go any distance. To this day he does not own his own car, although he is now a much more experienced driver and does drive for his job. </p>

<p>With my d. it was very different – I knew when she first got her learner’s permit and we did our first practice session in a parking lot. Instead of feeling like I was going to jump out of my skin, I found that after a few minutes I was totally relaxed and even joking around. She was so careful and cautious, wanting to be absolutely perfect - she insisted on practicing parking the car over & over again to make sure she could get in and out of parking spaces. Then she drove around on big graceful loops in a deserted parking lot, back and forth, around and around… my daughter is a dancer, and sitting next to her felt like the car was dancing. Dancers have such a strong sense of the space around them, and she extended that body-awareness to the car. I never felt nervous at all with her behind the wheel - in fact, I started letting her do most of the driving right away, because I thought she was a better driver than I am. Her dad started doing the same thing, because he also felt she handled the car better than he did. Even her brother agreed she was the best driver in the family. </p>

<p>But as I said – all kids are different. Before she was driving, she had older high school friends who were driving, that she would refuse to get in the car with. I would be miffed sometimes when I would have to give her a ride when she could have gotten one from a friend, but then she would tell me what a terrible driver the other kid was. It takes a combination of maturity and the ability to focus on multiple things at once, and do it automatically - that is, thinking about controlling the car, paying attention to everything else happening on the road, avoiding getting distracted by conversations or whatever is on the radio. </p>

<p>So bottom line - we all have to make those judgments, its part of our job as a parents. Its not a matter of being overprotective - its about having the good sense to know what your kid is capable of, and what she’s not ready for yet - and being honest with yourself and with your kid. I know you are very close to your daughter, and I’ll bet she understood and agreed with your decision. I know my son really disliked driving as a teen – it was hard for me to persuade him to even take the car to run an errand a few blocks away. I am sure that he felt nervous and scared when he drove. But age 22 is a whole lot different than age 16 - he still doesn’t like to drive all that much, but he’s now a much more confident and capable driver.</p>