In most states, you must pay sales tax when you buy the car. When you "gift" it to the recipient later, they may be exempt from paying sales tax again if you provide a "Gift Affidavit" (rules vary by state).
Many dealers are happy to help with a "reveal." They might provide the giant bow or even deliver the car to the recipient's house for a small fee. how to buy a car for someone
You generally cannot take out a loan for a car that will be titled in someone else's name. If you are financing the gift, you will likely need to be a co-signer or own the loan yourself until it’s paid off. In most states, you must pay sales tax when you buy the car
Ensure you have the recipient's full legal name and address for the paperwork. 3. Taxes and the "Gift" Rule You generally cannot take out a loan for
As of 2024, you can gift up to $18,000 per person without reporting it to the IRS. If the car costs more, you’ll need to file Form 709, though you likely won't owe taxes unless you've hit your lifetime exemption ($13+ million). 4. Insurance (The "Before You Drive" Step) A car cannot legally leave the lot without insurance.
If you want a "big bow" moment, you’ll likely need to buy the car in your name first and transfer the title later.
Have a folder ready with the bill of sale, the owner's manual, and a temporary registration tag.