how to gift a car in illinois

[DelPhoebe]

Gifting a car in Illinois involves a specific process centered on properly transferring the vehicle title without any exchange of money. The core requirements are correctly signing the title, obtaining a certified vehicle title application (VSD 190), and submitting these to the Illinois Secretary of State (SOS). The most critical step is correctly completing the "gift" section on the title to ensure the recipient is exempt from paying sales tax.

The first step is to obtain the current, signed title. On the back, in the assignment section, you must write "GIFT" or "$0" in the sale price field. Both you (the seller/donor) and the recipient must sign and print your names exactly as they appear on the front of the title. This documentation is crucial for proving no monetary transaction occurred.

Next, both parties need to complete the VSD 190 form. This serves as the official application for a new title. You must also complete a Vehicle Transaction Tax Exemption Form (VSD 62) to formally claim the tax exemption for a gift transfer. The recipient will need to provide proof of Illinois insurance for the vehicle.

Finally, the recipient must submit the required paperwork to an Illinois SOS facility. There is a fee for the new title and registration. While not always required, it's highly recommended to also complete a bill of sale stating the vehicle was a gift for $0, as this provides an extra layer of proof for the tax exemption. The table below outlines the key documents and typical costs involved.

Document/Fee	Purpose	Typical Cost (USD)
Signed Title (marked "GIFT")	Proof of ownership transfer	N/A
VSD 190 Form	Application for new title	$5 (electronic filing fee)
VSD 62 Form	Claim tax exemption for gift	$0
New Title Fee	Issuance of title to recipient	$155
Registration Fee	Annual license plate sticker	$151 (standard passenger vehicle)
Bill of Sale (Recommended)	Additional proof of $0 sale price	$0

[VonWyatt]

Just went through this with my daughter. The key is writing "GIFT" on the title where the sale price goes. Do not leave it blank. Then, you both go to the DMV with the title, your IDs, and the new insurance info. Fill out the tax exemption form they give you. The person getting the car will have to pay for the new title and registration, but you'll avoid the sales tax. It's pretty straightforward if you have the paperwork right.

[VanMatthew]

As someone who handles estate planning, I emphasize the importance of a paper trail. A gift transfer is clean, but you must document it meticulously. Beyond the title, draft a simple bill of sale stating "Consideration: $0.00" and "This is a bona fide gift." Both parties should sign and date it. This document, alongside the VSD 62 form, protects the recipient from future tax liability questions from the state. It’s about making the transaction unambiguous.

[AdelineMarie]

The main benefit of gifting a car in Illinois is the sales tax exemption, which can save the recipient hundreds of dollars. The state's tax is based on the sale price; by legally documenting the transfer as a gift with $0 value, that tax obligation is waived. The recipient still pays standard title and registration fees. The process is designed to prevent people from falsely claiming a gift to evade taxes, which is why the paperwork must be precise and clearly indicate "GIFT."