A bill of sale for a gifted car is a short written record showing that one person transferred a vehicle to another with no money changing hands. It names the donor and recipient, identifies the vehicle, states the price as zero, records the odometer reading and transfer date, and carries both signatures. You use it alongside the signed title, not in place of it.
What to Put in the Document
Most state motor vehicle agencies publish a standard bill of sale form, and using that form is the safest route because it already contains every field your state wants to see. If you draft your own, include each of these items:
- Full legal names and addresses for the donor (listed as “seller” on many forms) and the recipient (“buyer”), written exactly as they appear on government-issued ID.
- Vehicle description: year, make, model, body style, and primary exterior color.
- The 17-character Vehicle Identification Number, usually visible through the windshield on the driver’s side of the dashboard. Copy it exactly. A single wrong digit points to a different vehicle in state and federal databases.1eCFR. 49 CFR Part 565 – Vehicle Identification Number (VIN) Requirements
- Purchase price written as “GIFT” or “$0.00.” Never inflate or fabricate a price to manipulate tax assessments; falsifying this figure is fraud.
- Date of transfer: the specific calendar date the donor hands over the keys and title. This date marks when liability shifts.
- Odometer reading at the time of the gift.
Some state forms also ask for engine displacement or cylinder count. If a field is on the form, fill it in rather than leave it blank. Missing information is the most common reason motor vehicle agencies reject paperwork.
The Odometer Line
Federal odometer law defines a “transfer” as any change of ownership by sale, gift, or any other means, so the written mileage disclosure requirement applies even when no money changes hands.2Office of the Law Revision Counsel. 49 USC Ch 327 – Odometers3eCFR. 49 CFR Part 580 – Odometer Disclosure Requirements Record the mileage displayed on the odometer, rounded down to the nearest whole mile. If you know the odometer has rolled over or is inaccurate, disclose that the actual mileage is unknown rather than writing the displayed number as if it were correct. Knowingly providing a false odometer statement is a federal offense that carries civil and criminal penalties.4Office of the Law Revision Counsel. 49 USC 32709 – Penalties and Enforcement
An “As-Is” Statement
Adding an “as-is” line protects the donor from later claims that they hid mechanical problems or body damage. A single sentence works: “The donor transfers this vehicle in its current condition, with no warranties expressed or implied.” That language means the recipient accepts the car however it sits, whether the transmission is flawless or the check-engine light has been on for six months. Even among family, spelling this out prevents misunderstandings if the car breaks down a week after the handoff. You can also list known issues, such as “dent on rear passenger door” or “needs new brake pads,” which further shows both parties went in with open eyes.
Signing, Notaries, and Witnesses
Both parties sign using the same full legal names at the top of the document and date it on the day the transfer actually happens, not a past or future date. That date matters for insurance, liability, and the registration deadline.
Rules on notarization and witnesses vary by state. Some states accept a plain signature from both parties. Others require the signatures to be made in front of a notary public, who verifies each person’s identity and stamps the document with an official seal. Notary fees are set by state law and typically run from $2 to $25 per signature. A few states also require one or two disinterested witnesses to watch the signing and add their own signatures. Check your state motor vehicle agency’s website before signing day so you know whether to book a notary appointment or line up witnesses. A missing notary stamp or witness signature is a common reason transfer paperwork gets rejected, and starting over eats into the registration deadline.
How the Bill of Sale Fits With the Title
A common mistake is treating the bill of sale as the document that transfers ownership. It isn’t. The vehicle title, issued by your state’s motor vehicle agency, is the legal certificate of ownership. When you gift a car, you sign the back of the title over to the recipient, filling in their name, the date, and the odometer reading. The bill of sale is a separate companion document that records the terms, specifically that the price was zero and the car was a gift.
You need both because the title alone doesn’t explain why the purchase price field is blank, and the bill of sale alone doesn’t prove who holds legal ownership. If the vehicle still has an outstanding loan, the lienholder’s name appears on the title and the donor must pay off that balance before the title can be released and signed over. A car with an active lien cannot be cleanly gifted.
Protecting the Donor After Handoff
Signing the title and bill of sale does not instantly update state records. Until the recipient actually registers the car, the vehicle still shows the donor’s name in the database. Automated toll bills, parking tickets, and traffic camera citations can land in the donor’s mailbox for weeks or months.
Most states offer a “notice of transfer” or “release of liability” form that the donor can file independently. It tells the motor vehicle agency that you no longer own the vehicle as of a specific date, which shields you from citations issued after that date even if the recipient drags their feet. Filing it does not transfer the title; it puts the state on notice. The recipient still has to complete their own registration.
Keep copies of everything: the bill of sale, photos of the signed title, the recorded odometer reading, and any messages confirming the gift. If a dispute surfaces later, those records are the fastest way to prove when the car left your hands. Store digital copies in addition to paper originals.
Taxes to Expect
Gifting a car is a taxable event under federal gift tax rules, but most people won’t owe anything. The annual gift tax exclusion for 2026 is $19,000 per recipient.5Internal Revenue Service. What’s New – Estate and Gift Tax If the car’s fair market value is at or below that threshold, no federal filing is required.
If the car is worth more than $19,000, the donor files IRS Form 709. Filing doesn’t automatically mean tax is owed; the form reports the gift, and the amount above $19,000 counts against the donor’s lifetime gift and estate tax exemption. Failing to file when required can trigger penalties.6Internal Revenue Service. Instructions for Form 709 Gifts between spouses who are both U.S. citizens are fully exempt under the unlimited marital deduction, so no Form 709 is needed regardless of value. If the spouse is not a U.S. citizen, a separate annual exclusion of $190,000 applies.7Internal Revenue Service. Frequently Asked Questions on Gift Taxes
State sales or use tax is the other half of the picture. Many states assess tax on vehicle transfers based on fair market value rather than price paid, so a gift with a $0 price can still trigger a state tax bill. Most states offer partial or full exemptions for vehicles gifted between immediate family members, though the qualifying relationships and required documentation differ. Some states limit the exemption to parent-child and spousal transfers. Others include siblings, grandparents, or stepchildren. Nearly all require a signed affidavit confirming the family relationship and that no money changed hands. Recipients who aren’t qualifying family members should expect to pay use tax on the state’s valuation. Misrepresenting a sale as a gift to dodge this tax is fraud, and states look for suspiciously low-value transfers between unrelated parties.
What the Recipient Brings to Register
Once the bill of sale is signed and the title is endorsed, the recipient takes everything to the motor vehicle agency. States commonly set a registration deadline between 10 and 30 days from the transfer date, and missing it usually triggers a late fee. The recipient should plan to bring:
- The signed vehicle title with the donor’s signature and odometer disclosure.
- The completed bill of sale showing $0.00 or “GIFT.”
- A gift affidavit if the state requires one, especially to claim the family-member tax exemption.
- Proof of insurance in the recipient’s name. Most states require coverage before issuing registration, and the recipient should have a policy in place before driving the car away.
- Valid photo identification.
The agency will charge a title transfer fee and registration fees. Title transfer fees across states generally run from around $10 to $75, with registration costs on top. Some states also require a safety or emissions inspection before issuing new registration, and any applicable use tax is assessed during the same visit. Many agencies now accept scanned documents through an online portal, which can save a trip, so check your state’s website before driving to an office.