Gifted Car and a Confusion of Factors

October 30, 2020 3:02 PM

I'm being "gifted" a car by a friend in California and within a few days driving it to my new state of residence, (Kansas), can you help me sort through how it's best to transfer ownership based on registration rules?

I think much of this information is either online buried somewhere or a DMV agent should help, but currently phone wait times are about 1hr 45 minutes to speak with any agent, so anything you could help me understand would be greatly appreciated!

I've lived in California for many years, but in a few weeks will be moving to Kansas. A friend is "gifting me" a used car a few days before I leave to move. (It's currently being inspected by a mechanic to make sure it will last the trip.)

- I have a California driver's license (not relevant, I know, but wanted to be clear)
- The car currently has a valid license plate
- My friend has the title document

I assume he'll have to sign the title document over to me at some point, and I am guessing it needs to be notarized, which I think means the transfer of title has to happen BEFORE I leave.

I know it doesn't usually take much time to get insurance, but I'm not sure if it'll need to be registered in some state before it can be insured?

I'm not sure if I need to apply for a temporary operating permit, but based on the below, I'm not sure this applies because I don't want to register the vehicle in California.
A Temporary Operating Permit (TOP) may be issued in certain circumstances when all registration fees have been paid, but license plates and/or registration stickers haven’t been issued.

I assume I'll need to fill out a "transfer of title" document and that CA will want to tax me around 12% of the sale, but since it's being gift, I assume that won't apply.

I'm not sure what else I'm missing, but my goal is to transfer ownership such that I don't have to get the car registered in the California, but I'm not sure what would happen if the police stopped us along the drive.

Any information would be great, thank you!

posted by BeatriceB to Law & Government (4 answers total)

Best answer: You get insurance immediately upon getting the car. You register later.

Ideally you would just register the car once, in Kansas, once you have an address. You should be able to take your California title, with it signed over to you and notarized, to the Kansas DMV. You'll give it to them at time of registration and they will issue you a new Kansas title (which they'd mail to you later).

I don't know the rules around what you're supposed to do with the old license plate; that depends on the state.
posted by Huffy Puffy at 3:07 PM on October 30, 2020

Response by poster: Very helpful, thank you! So, it sounds like I don't need to worry about registration until I arrive? If I'm pulled over and a cop says "license and registration" I should just show him the title that shows the recent transfer of ownership and hope I look like a nice person!
posted by BeatriceB at 3:21 PM on October 30, 2020

Best answer: If the car is currently registered to your friend, you can legally drive it (but they're on the hook if something should happen to it when you are driving it). Unless you are a household member of your friend, this would just be like you borrowing it, also legal. It's a lot easier to do what Huffy Puffy suggests, insure it before you go (it's insurance for you really, not the car per se) and register it to yourself in Kansas, but it would mean your friend would have to trust you to do the right thing with all of these things because you could just choose to NOT re-register it in Kansas and then your friend would still own it which is not what they want.

since it's being gift, I assume that won't apply.

This depends on the state but in most states you can't get around the tax this way unless you are a non-profit organization. Usually you pay tax based on the value of the car, not how much you paid for it. Might be worth looking into this, if the car is worth substantially less than its book value, it's worth having that in the bill of sale.

My experience with title transfers is that they don't require notarization. And yes, license plate stuff varies, but worst case you just mail it back to your friend when you register the car and get new plates.

And yes re: cops. Drive carefully but just say "I bought this car and am registering it in Kansas when I get there, here is my insurance" if the car is registered to SOMEONE that is usually okay. Make sure you have a bill of sale also, even if it's a gift, DMV will want to see that.
posted by jessamyn at 4:18 PM on October 30, 2020

Best answer: Have your friend draw up a Bill of Sale for, like, $10. Bring that to the DMV in Kansas when you switch the registration and get your new title. Trust me, this will be much, much easier and cheap than having it be a gift.
posted by ananci at 8:51 AM on October 31, 2020 [1 favorite]