Gifting a car to a loved one may seem like a generous and simple gesture—but in South Carolina, it can quickly become complicated if not done properly. Whether you’re handing over the keys to your child, a parent, or a close friend, there are important legal, tax, and title-transfer steps to follow. Skipping these steps can lead to unexpected fees, disputes, or even liability issues down the road.
If you’re planning to gift a vehicle in Charleston, Columbia, or anywhere in South Carolina, here’s what you need to know to keep things legal and smooth.
Is Gifting a Car in South Carolina Legal?
Yes, absolutely. South Carolina law allows individuals to gift vehicles to family members or other individuals. However, like any vehicle transfer, it must be properly documented with the South Carolina Department of Motor Vehicles (SCDMV). Unlike a typical sale, a gift involves no exchange of money, but it still requires the correct paperwork.
Step 1: Use a Proper Bill of Sale
Even though no money changes hands, South Carolina still requires a Bill of Sale or a Title Assignment that clearly states the vehicle is a gift. Write “gift” in the section that would normally list the sale price. This clarifies the intent and protects both parties from future tax or ownership issues.
Step 2: Transfer the Title
To legally gift a car, you must sign over the title to the recipient. On the title certificate:
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List “gift” as the sale price
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Include the mileage, signatures, and date
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Ensure the recipient completes the Application for Certificate of Title (SCDMV Form 400)
If there’s a lien on the car, the process may require additional steps.
Step 3: Know the Tax Implications
South Carolina waives sales tax on vehicles transferred as gifts only if the gift is between immediate family members—such as a spouse, parent, child, grandparent, or grandchild. If you’re gifting a car to a friend, cousin, or unrelated individual, they may still owe infrastructure maintenance fees (IMF) and taxes.
To prove the transfer is a tax-exempt gift between relatives, the recipient may need to complete SCDMV Form TI-021A (Affidavit of Immediate Family Relationship).
Step 4: Notify Your Insurance Provider
Once the title is transferred, the recipient must obtain insurance before registering the car in their name. If you’re removing the car from your insurance, make sure it’s not being driven until new coverage is in place.
Step 5: Understand Liability Risks
Here’s where many people make a costly mistake: not properly transferring the title or registration. If you simply “hand over” the keys without updating the ownership records, you could still be held liable for accidents, tolls, or traffic violations committed by the new driver.
Never allow someone to drive a vehicle still titled and registered in your name. Protect yourself by making sure the transfer is completed through the SCDMV and the DMV record is updated.
Bonus Tip: Don’t Gift a Car with Debt Attached
If there’s a loan or lien on the car, you cannot gift it without resolving the lien first—or getting permission from the lender. The lender typically must approve the title transfer, and in some cases, the recipient may have to refinance or assume the loan.
Make Sure the Gift Is a Legal One—Talk to Mulet Law
At Mulet Law, we help families across South Carolina avoid legal pitfalls when transferring property—including vehicles. Whether you’re gifting a car as part of an estate plan or simply want to make a generous gesture to a loved one, we can ensure the process is done right.
📞 Contact Mulet Law today to schedule a consultation and protect yourself from the hidden risks of gifting a vehicle in South Carolina.