Gifting A Car In Washington State Guide To Title Transfer

Gifting a vehicle in Washington state is a thoughtful and practical way to help a family member or loved one get reliable transportation. Whether you're passing down a car to a child, helping a parent transition to a new vehicle, or supporting a friend in need, the process involves more than just handing over the keys. A proper title transfer ensures legal ownership changes hands smoothly and avoids future complications with registration, insurance, or liability.

Washington’s Department of Licensing (DOL) has clear procedures for transferring a vehicle title as a gift. While it may seem straightforward, skipping steps or submitting incorrect paperwork can lead to delays, fines, or even rejection of the transfer. This guide walks through every stage—from preparing the title to final registration—so you can complete the process confidently and correctly.

Understanding Gifted Vehicle Transfers in Washington

In Washington, transferring a car as a gift means no money changes hands. The transaction is recorded as “$0” sale price on official forms. However, this does not exempt the recipient from all fees. While sales tax is waived for genuine gifts between immediate family members, there are still standard transfer fees, title processing charges, and potential registration costs.

The key distinction between a regular sale and a gifted transfer lies in documentation. You must clearly indicate that the transfer is a gift and provide proof of relationship if claiming exemption from use tax. The DOL defines immediate family as spouses, parents, children, siblings, grandparents, grandchildren, and step-relatives within those categories.

“Properly documenting a vehicle gift protects both parties and prevents future disputes over ownership.” — Washington State Department of Licensing Spokesperson

Step-by-Step Title Transfer Process

To legally transfer a vehicle title as a gift in Washington, follow these essential steps:

1. Obtain the original vehicle title. The current owner (giver) must have a clean title in their name. If there's a lien, it must be paid off and released before transfer.
2. Complete the title assignment section. On the back of the title, fill out the buyer/seller sections. For “Sale Price,” write “Gift” or “$0.” Include full names, addresses, and signatures of both parties.
3. Fill out the Vehicle Gift Statement (Form TD-420-002). This form is required when reporting a $0 sale. It confirms the relationship between giver and receiver and supports tax exemption.
4. Submit documents to a WA DOL office. Both parties don’t need to appear together, but all signatures must be notarized if the transfer is by mail.
5. Pay applicable fees. These include a $15.50 title transfer fee and registration costs based on the recipient’s county and vehicle type.
6. Register the vehicle in the recipient’s name. The new owner must register the car within 30 days to avoid late penalties.

Tip: Always double-check spelling and dates on the title. Errors can delay processing by weeks.

Required Documents Checklist

Before visiting a DOL office or mailing your application, ensure you have all necessary documents ready:

• Original signed vehicle title (with assignment section completed)
• Completed Vehicle Gift Statement (TD-420-002)
• Odometer disclosure statement (required for vehicles under 10 years old)
• Proof of emissions testing (if applicable in King, Pierce, or Snohomish counties)
• Photo ID for the new owner
• Proof of insurance in the recipient’s name
• Notarized signatures (if submitting by mail)

Tax Implications and Exemptions

One of the main benefits of gifting a car in Washington is the potential exemption from use tax. When a vehicle is sold, the buyer typically pays sales/use tax based on its value. But if transferred as a gift between qualifying family members, this tax is waived.

To qualify for the exemption, you must:

• Declare the transfer as a gift (not a disguised sale)
• Be related as defined by WA law (immediate family only)
• Submit Form TD-420-002 with your application

If the recipient is not a family member (e.g., a friend), they will owe use tax based on the vehicle’s fair market value unless another exemption applies.

Transfer Type	Sale Price	Use Tax Owed?	Required Forms
Gift – Immediate Family	$0	No	Title, TD-420-002, Odometer Statement
Gift – Non-Family	$0	Yes (based on FMV)	Title, TD-420-002, VTR-7, Payment
Sale – Any Party	Agreed Amount	Yes	Title, VTR-7, Payment

Tip: Even if no tax is owed, always file Form TD-420-002 to create a clear paper trail and prevent audit issues.

Real-Life Example: Transferring a Car to a College Student

Sarah, a resident of Tacoma, wanted to gift her 2015 Honda Civic to her daughter Emma, who was starting her sophomore year at UW. The car had a clean title in Sarah’s name and was fully paid off.

Sarah began by downloading Form TD-420-002 from the WA DOL website. She filled it out with Emma’s information and noted their mother-daughter relationship. She also checked that the odometer reading matched the current mileage.

At their local DOL office, Sarah and Emma brought the signed title, completed gift form, proof of Emma’s insurance, and driver’s license. They paid a $15.50 title fee and $38 for registration. Because they were immediate family, no use tax was charged. The entire process took less than 30 minutes, and Emma left with a new-to-her title and registration card.

This example shows how a well-prepared gift transfer can be fast, affordable, and stress-free.

Frequently Asked Questions

Can I gift a car if there’s still a loan on it?

No. If there’s an outstanding lien, the loan must be paid in full and the lien release document provided before the title can be transferred. The lender holds the title until the debt is settled.

Do both the giver and receiver need to appear in person?

No. Only the new owner needs to appear in person to register the vehicle. However, the giver’s signature on the title must be notarized if they cannot attend.

What happens if I don’t transfer the title right away?

The previous owner remains legally responsible for the vehicle, including parking tickets, tolls, or traffic violations incurred after the gift. Washington requires title transfers within 10 days and registration within 30 days of the transfer date.

Final Tips for a Smooth Transfer

Gifting a car is more than a kind gesture—it’s a legal transaction that requires attention to detail. To ensure everything goes smoothly:

• Verify the title is in your name and free of liens
• Accurately complete all forms before visiting the DOL
• Confirm insurance is active before driving the vehicle
• Keep copies of all submitted documents for your records
• Update your own auto insurance to remove the gifted vehicle

“A properly executed title transfer protects both the giver and receiver. It closes your liability and gives the new owner full rights to insure, sell, or modify the vehicle.” — WA DOL Field Supervisor

Take Action Today

If you’re ready to gift a car in Washington, now is the time to gather your documents and start the process. With clear steps and the right forms, you can pass along more than just a vehicle—you’re giving peace of mind, independence, and lasting value. Don’t let paperwork stand in the way of a meaningful gift. Prepare, submit, and enjoy knowing you’ve made a real difference.

💬 Have questions about your specific situation? Share your story in the comments—we’ll help guide you through the next steps.