Yes, you can absolutely gift a car to a family member in New Jersey, and if you follow the correct procedure, the recipient can avoid paying the state's 6.625% sales tax. The key is properly documenting the transaction as a bona fide gift to the New Jersey Motor Vehicle Commission (MVC). You'll need to complete the correct forms, primarily the Title and the REG-5 form, and may need to sign an affidavit stating the vehicle is a gift.
The most critical step is transferring the certificate of title. As the gifter, you must sign the title over to the recipient. In the "seller" section, you would write your name and the sale price as "$0" or "Gift." The recipient, as the buyer, then signs the title. Simply handing over the title is not enough; the transfer must be formalized at the MVC.
Essential Documentation and Steps:
- Secure the Title: Ensure you have the physical, clean title (no liens).
- Complete the Title Transfer: Correctly assign the title to the recipient for $0.
- Fill out the REG-5 Form (Application for Certificate of Ownership): This is the standard form for all vehicle transactions. The recipient must complete this.
- Provide a Notarized Affidavit of Gift: While not always strictly required, the MVC may request a notarized statement from you, the giver, affirming that the vehicle is a genuine gift with no payment involved. Having this prepared prevents delays.
- Gather Proof of Insurance: The recipient must have a valid New Jersey insurance policy for the vehicle before registration.
- Visit the Local MVC Office: The recipient must bring all documents—the gifted title, completed REG-5, their driver's license, proof of insurance, and the affidavit if prepared—to an MVC agency to complete the transfer, register the vehicle, and receive new plates.
Avoiding sales tax is the primary benefit, but all standard fees, such as the title and registration fees, still apply.
