What to Know About Insurance and Gifting a Car

The holidays are a wonderful time to give the gift of a car. However, it may not be as simple as you think it is. There’s more entailed than just driving the car into the person’s driveway and handing them the keys. You’re presenting them with a responsibility, and it entails a great deal on both parties’ parts. 

Financial Obligations

Although you’re paying for the car, the financial obligation goes beyond that. There are insurance premiums that must be paid. The policy must meet the state’s minimum requirements. You must decide if you’re going to pay for the premiums as part of the present or if the other person is financially responsible. Make sure you keep in mind if the person is capable of making the premiums. 

Just like insurance premium requirements, each state has its own laws in regards to taxes associated with receiving a gift of a vehicle. That means, the giftee may have to pay taxes.

The person may have other expenses as well such as a fee to park the automobile in his or her residence. And then there are the inevitable maintenance fees. You need to take this all into consideration before being generous. 

Paperwork

In Plano, TX, a person must register a vehicle. That means you’ll need first to put it in your name and transfer it if you want it to be a surprise. There are fees associated with registering and transferring. 

Insurance

The car requires insurance, which means you may need to put it in your name. You have to take into consideration your driving history. 

Buying a car seems like a wonderful holiday present, but there is more involved. Make sure you know the person’s situation, and you know your state’s laws, especially involving insurance. 

Contact Paragon Independent Insurance Agency at 972-473-4813 today to get quote if you’re planning on giving a four-wheeled gift.