To gift a car in Indiana, pay off any loan on the vehicle, sign the title over to the recipient with “gift” written in the price field, complete a notarized Affidavit of Gift (State Form 48846) so no sales tax is charged, and have the recipient bring the paperwork, proof of insurance, and about $15 in title fees to a BMV branch within 45 days of the transfer.
The process is straightforward when both people prepare. Skipping a step usually means a wasted trip, a 7% sales tax bill, or a $30 late penalty.
Clear the Lien Before Anything Else
You cannot transfer a title that still shows a lien. Indiana’s BMV requires every lienholder to release its interest before the title moves to a new owner.1Bureau of Motor Vehicles. Liens
If the loan is paid off, the lender either signs the lien release section on the paper title or releases it electronically for an electronic title. A written release needs the titled owner’s name, the release date, and the vehicle’s year, make, and VIN, signed by a company officer.1Bureau of Motor Vehicles. Liens If the lender is out of business, you’ll need a court order directing the BMV to release the lien.
One trap catches donors who paid off a loan years ago: the lender may never have submitted the release, so the lien still sits on BMV records. Check the title before you start, and get a formal release from the lender if anything shows.
Documents the Donor and Recipient Need
The Indiana Certificate of Title
The donor signs the seller’s section and fills in the recipient’s name and address in the buyer’s section. The VIN and the current odometer reading both have to appear on the title.2Bureau of Motor Vehicles. Buying and Selling a Vehicle Where the form asks for a sale price, write “gift.”
If the title is lost or damaged, order a duplicate before starting the transfer. You can request one through myBMV, at a BMV Connect kiosk, by mail, or in person, and the fee is $15.3Indiana BMV. How Do I Replace a Lost or Damaged Title4Bureau of Motor Vehicles. BMV Fee Chart If a lien still shows on BMV records, the duplicate goes to the lienholder rather than to you, so bring proof of release to the branch.
Affidavit of Gift (State Form 48846)
This affidavit declares that the vehicle is being transferred with no money or other consideration exchanged. It’s the document the BMV uses to apply the sales tax exemption, so it isn’t optional if you want to avoid the tax. Download Form 48846 from the BMV’s title forms page or pick one up at a branch.5Indiana Bureau of Motor Vehicles. Title Forms Both people sign it, and getting it notarized before the BMV visit prevents being turned away at the window.
Bill of Sale
A bill of sale isn’t required, but writing one takes a few minutes and creates a written record that the car changed hands as a gift. Include both full names, the date, the VIN, and a plain statement that no money was exchanged. Keep a copy each.
How the Sales Tax Exemption Works
Indiana charges 7% sales tax on vehicle purchases, and a genuine gift is generally exempt. The requirement is simple in principle: nothing of value can have been exchanged for the car. The completed Affidavit of Gift is how the BMV verifies that.
The exemption is most commonly granted between immediate family: parent, child, grandparent, grandchild, spouse, or sibling. Transfers between non-family members draw more scrutiny, and the BMV may ask for additional documentation to confirm the gift is real. If the BMV finds that any consideration changed hands, the recipient owes the full 7% based on the vehicle’s fair market value. Fill out the affidavit thoroughly and honestly, and keep a copy for your records.
The Recipient’s BMV Visit
Once the title is signed and the affidavit is notarized, the recipient goes to an Indiana BMV branch to register the car and have a new title issued. Bring:
- The signed title with both sections completed
- The notarized Affidavit of Gift (Form 48846)
- Proof of Indiana auto insurance
- A valid Indiana driver’s license or state ID
Indiana’s minimum liability coverage is 25/50/25: $25,000 for bodily injury per person, $50,000 per accident, and $25,000 for property damage.6Bureau of Motor Vehicles. Proof of Financial Responsibility The coverage has to be in place before the recipient arrives. If you’re adding the car to an existing policy, your insurer can issue a binder as temporary proof.
If the vehicle was previously titled in another state, the BMV needs a VIN inspection before issuing an Indiana title. Call your local branch to schedule the inspection ahead of the visit so it doesn’t hold up the transfer.
Fees and the 45-Day Deadline
The recipient pays the fees at the BMV. Based on the fee chart revised January 1, 2026:4Bureau of Motor Vehicles. BMV Fee Chart
- Title transfer: $15
- Vehicle registration: $21.35 for a standard passenger vehicle
- Transportation Infrastructure Improvement Fee: $15
- Plate transfer or replacement: $9.50 (a new plate carries its own fee)
- Late title penalty: $30 if the deadline is missed
The transfer has to happen within 45 days of the recipient taking possession. There is no grace period, and missing the window triggers the $30 penalty on top of the regular title fee.4Bureau of Motor Vehicles. BMV Fee Chart Don’t let the paperwork sit in a drawer.
The recipient should also plan for Indiana’s annual vehicle excise tax, which functions as the vehicle’s property tax and is billed each year rather than collected at transfer.
Federal Gift Tax on Higher-Value Cars
Indiana has no state gift tax. Federal gift tax can apply if the car is valuable enough. For 2026, the annual gift tax exclusion is $19,000 per recipient.7Internal Revenue Service. What’s New – Estate and Gift Tax If the car’s fair market value is under that, there’s no federal reporting to do.
If the car is worth more than $19,000, the donor files IRS Form 709 for that year.8Internal Revenue Service. Instructions for Form 709 Filing doesn’t mean owing tax. The amount above $19,000 counts against the donor’s lifetime exemption, which for 2026 is over $13 million. Married couples can split the gift, effectively doubling the exclusion to $38,000 on a single car. The number that matters on Form 709 is the vehicle’s fair market value on the date of the gift, not what the donor paid for it. Kelley Blue Book or NADA Guides can establish a defensible figure; keep a printout with your tax records.
Mistakes That Cause a Return Trip
Most problems at the BMV window come from a short list of preventable errors. The donor forgets to sign the title, or signs in the wrong section. The odometer reading is left blank. The Affidavit of Gift isn’t notarized. Any one of these sends you home.
Two others worth checking before you leave the house. If the donor’s legal name has changed since the title was issued, bring documentation of the name change. And if the title shows any old lien notation, contact the lender for a formal release before you go, because the BMV cannot process the transfer while a lien still appears on file.1Bureau of Motor Vehicles. Liens