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<p>The annual exclusion for gifts is $11,000, since 2004.</p>
<p>In our state, you can sell a car to a relative without paying sales tax. In no state do you have to incur the gift tax when gifting a car unless it’s one outrageously expensive car. You can gift a child $11,000/yr/parent. Evenif it were over that, you simply file a gift tax return to reduce your lifetime allowance by that amount. The student still pays no gift tax. Maybe car dealers should stop giving out tax advice.</p>
<p>in my state you have to be on the insurance. My little sister has had her permit for six months now, and she’s been on the insurance since the day she got her permit. she couldn’t even drive our cars with us in them if not on them. That’s specific to my insurance company though - back when i had my permit I didn’t need to be on the insurance… i was added the day I got my license - we had a different insurance company. </p>
<p>i don’t know if the whole one dollar thing actually works, it’s just what popped into my head.</p>
<p>about two and a half years ago, my mom and i traded cars. she gave me her 1992 car, and i gave her my 1987 car. no cash included in the swap. All i remember paying for was the transfer of title, and the tags for my “new” car. she then traded my old car in on her brand new car, and i continued to drive her old car for the next two years, until i decided to buy a new car… and i traded her old car in on that. it worked out the best for the both of us.</p>
<p>the reason i said about having your name on the title is, at least in my state, if your daughter is on your insurance policy, you (or your husbands name… whoever the policy’s under) must be on that title. </p>
<p>when i bought my first car, my parents names had to be on it because i was under 18. when i traded with my mom, we were just going to put my name on her old car, but to be on their insurance plan I needed to have my moms name on it. i’m still on their insurance plan, untill it runs out this year, then i’m getting my own plan (probably somewhere else). </p>
<p>when i bought my new car (in november), i had to put my mom/dads name on the title in order to remain on their car insurance plan. once i graduate i’m going to be refinancing my car loan, as well as switching the title over to just myself, and getting my own insurance plan. </p>
<p>but that kind of stuff may be different in your state…</p>
<p>We’ll agree to disagree.</p>
<p>Of course, if a child cannot pass the driver’s test, that’s a different matter but otherwise…</p>
<p>We live in a block with an ‘Independence House’, a group living house for mentally challenged adults. Many of them drive. They have cars. They are far, far below the description of lts’s daughter but they still drive without incident. </p>
<p>However, each parent is entitled to their own choices. My comment was more a reflection of what’s happened with my nephews. In my opinion, they would mature at a better rate if their parents took the cotton wool off of them. My opinion, but I’m a frying pan kind of person. I pushed both sons to get their permits. I hate to drive with them, but I love what driving has done to their sense of self.</p>
<p>Your D should be thrilled with the Taurus.</p>
<p>(Whoops. Missed that about the limit being raised in 2004. Overseas).</p>
<p>Very funny to even bring up the gift tax issue! A 10yr old Taurus with 100k miles is worth $1k… $2k max!! :)</p>
<p>Every state is a little different, but most states want your money!! We bought my son a car for $2000 (Actually, it is my car - it is titled in my name) and dutifully registered and paid the required sales tax. Several months later I got a letter from DMV telling me the bluebook value of the car was $4,500 and I owed extra tax!! I was very pleased that I got such a great deal, and they accepted a copy of the check as proof that I only paid $2000. I have heard that some states don’t care what you actually paid for the car and charge you tax based on bluebook value. </p>
<p>My total car insurance bill is roughly the same with my son added as a driver to our 2 cars, or him being the main driver on his own car.</p>
<p>My insurance went down once i became the main driver of my own car. When i was a driver on my parents two cars, i paid XX per month insurance. (yes, I paid), and when i got my own car it was actually 15 dollars per month cheaper, because it was a much older car. It went up a lot once I got my new car, but that’s because I have collision on it now.</p>
<p>Some states allow cars to be given to family members without sales tax. Your DMV would have this information. </p>
<p>There really is not a $1 sale. However, sell it for about $100 or so, and they’ll only tax on that. (We talked about this in Contracts - there has to be reasonable consideration. $100 is convincing enough for a car - it could be a junk heap with 100,000 miles on it.) </p>
<p>Why would she pay sales tax AND gift tax? That’s got to be wrong.</p>
<p>Yes, she’ll have to pay for her own tags. When I “bought” my car from my parents, I had to shell out about $100 for everything - no tax b/c it was family, but title transfer, license plates, and new registration.</p>
<p>CalMom, one of our investments in peace of mind is adding our D to our AAA account. She has her own card, which we’ll pay for until she’s 21 or has her own car with her own insurance, whichever comes first…she’s just added on as an extra family member. </p>
<p>Even when she’s across country, it’s still valid even though she doesn’t have a car. She could be riding with a friend, or whatever, and voila! Cellphone + AAA card = roadside assistance.</p>
<p>Just one less thing to worry about. A AAA card was the first joint account TheMom and I opened. Don’t use it at all some years…still been worth it.</p>
<p>TheDad - We have emergency road service on the cell phone plan. I have at times waited well over an hour for help from AAA. In fact, I can’t remember ever waiting LESS than an hour . A lot could happen in that time. I’m not worried about the car dying, I’m worried about the daughter-waiting-alone-for-help part. Anyway, that’s why she is driving the better, safer car. She also needs to drive more than me – I work from home, so I really only drive around town to the post office, bank, or supermarket on most days - she commutes to the city every day.</p>
<p>I have road side assistance that came with my car. Haven’t had to use it yet. (knocking on wood).</p>
<p>Calmom, you’re right, D does not care at all about driving - then or now. I just told her about the car tonight - she said something like “oh that’s exciting” and then went on to tell me about 5:00 a.m. practice, weights, the upcoming chem final, the banquet, someone’s summer scholarship money, an internship opportunity, a paragraph she has to write by 5:00 a.m., the team captain vote, the web page for SAC, and some other stuff I forgot. The car is “nice” but with us it’s a housekeeping issue, not a celebratory event. Interesting though that your D is such an excellent driver - it must be in part due to her dancing and heightened physical perception, combined with emotional maturity. </p>
<p>I do like AAA. I have the package with 100 mile free towing - haven’t had to use it for anything serious, but I’ve been a member for years. </p>
<p>I didn’t call DMV yet - too busy. Think I’ll wait until after finals and have her do it, since it’s to be her car. She can untangle all the red tape and tell me what we need to do. </p>
<p>Cheers: D passed the driving test no problem. My state recognizes no relationship whatsoever between driving ability and the distribution of licenses. Anyone here can get a license - the demented and criminally insane, the seriously visually impaired, those whose cerebral neurons have long stopped synapsing consecutively, or who cannot steer a grocery cart let alone a 3,000 pound machine, total illiterates, the chemically addicted, etc. (No offense intended to persons with disabilities.) The state government issuing a drivers license does not translate to any ability to actually drive a car with even a minimum degree of competence. They should just dispense licenses out of vending machines, as they could close the offices and reduce staff, and the result would be the same or perhaps even better. </p>
<p>Perhaps your state is different - I know mine was, as I failed the driving test three times (couldn’t parallel park, then or now).</p>
<p>Thanks for the tax info. When I get the information I’ll post it back if it’s worth knowing. Surely it will simply be a sales tax issue.</p>
<p>Hmmm – if she isn’t all that excited about the car, maybe the best thing for you to do would be to sell it instead of giving it to her. If she doesn’t need it to get around, I can see her thinking that a car, and all the responsibilities and expenses that come with it, will be more trouble than its worth. </p>
<p>My son doesn’t own a car - he has been on his own and working now for a year and a half. He does access to a car through his work, but there seems to be no desire whatsoever to own his own. I think he’d rather put his money in the bank than in the gas tank. </p>
<p>Kids can be really different about these things. My daughter’s car is more than “transportation” – it is also her social center. She ends up sitting for hours with her friends parked in the car and talking and listening to music – a can’t imagine anything more boring. The very first thing she did after we bought the car was go out and install a cd-player.</p>
<p>My Ss weren’t excited about driving or the cars. </p>
<p>Too bad. A guy showed up to teach them how to drive. (Who dat?) </p>
<p>Then, on the day, I took them over to the DMV and voila: drivers.</p>
<p>Their Dad took them out car shopping and found them a cheap Subaru wagon without turbo (no turbo said the insurance guy), but with dual airbags. The boys decided to share the car and handed over a third of the money and voila: 1 driver with car and 1 driver-to-be with car-to-be.</p>
<p>They still aren’t motorheads, but they do love the freedom that the car, (now dented from parking <em>mishaps</em>), brings.</p>
<p>I gave one of my cars to a sibling in California last year; there was a box to check that it was a gift, and no tax was charged.</p>