To gift a car in Tennessee, the donor signs over the title, both parties complete a gift affidavit, and the recipient takes everything to a county clerk’s office to register the vehicle in their name. A genuine gift between individuals is exempt from Tennessee sales tax, which is where most of the savings come from. Title, registration, and county fees still apply.
Pay Off Any Loan First
If the car still has a loan balance, the lender holds a lien on the title and ownership cannot be transferred until that lien is released. Tennessee will only issue a duplicate title on a lien-encumbered vehicle to the lienholder, not the owner, so the donor has to satisfy the loan before anything else can happen.
Once the debt is paid, the lienholder sends a lien discharge to the Tennessee Department of Revenue’s Vehicle Services Division. That can be the signed tear-away portion at the top of the certificate of title, a copy of the title with the release section signed, or a release on the lender’s letterhead showing the full VIN. After the discharge is recorded, the owner can request a clean title and move forward with the gift.
Paperwork You Need at the Clerk’s Office
Tennessee requires a specific set of documents before the county clerk will process a vehicle gift. Missing any one of them is the most common reason people get sent home.
- The original title, signed by the donor on the back in the seller/transferor section with the recipient’s name filled in.1Tennessee Department of Revenue. VT-1 – Documents Needed to Title a Vehicle (Current Resident)
- The Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats, sometimes called the Affidavit of Gift. It records both parties’ names, addresses, and driver’s license numbers, plus the vehicle’s VIN, make, model, year, and transfer date. Donor and recipient both sign under penalty of perjury.2Tennessee Department of Revenue. Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats
- An odometer disclosure. Federal law requires the donor to record exact mileage at the time of transfer, and the statement is usually printed on the title itself. Vehicles with a 2010 or older model year are exempt from odometer disclosure when transferred in 2026, but 2011 and newer vehicles fall under a 20-year exemption window, so a 2011 model won’t be exempt until 2031.3eCFR. 49 CFR Part 580 – Odometer Disclosure Requirements
- Valid photo ID for both parties, plus proof of Tennessee residency for the recipient. A current utility bill, bank statement, mortgage contract, or employer verification will satisfy the residency requirement.4TN.gov. Acceptable Forms of Identification and Residency for Vehicle Title and Registration
Download the Affidavit from the Tennessee Department of Revenue website or pick one up at the clerk’s office. Fill it out completely before you go. Incomplete forms are the fastest way to lose an afternoon.
Why the Sales Tax Goes Away
Tennessee’s rule is straightforward: when no money or other consideration changes hands, no sales tax is due on a vehicle transfer between individuals.5Tennessee Department of Revenue. GI-10 – No Sales Tax on a Gifted Vehicle The Affidavit of Non-Dealer Transfers is what triggers the exemption at the counter. Without it, the clerk will calculate sales tax as if you bought the car.
Gifts and Sales Between Family Members
Transfers to close relatives get an even broader exemption that covers sales, not just gifts. Spouses, siblings, children, grandchildren, great-grandchildren, parents, grandparents, and great-grandparents all qualify, and so do the spouses of your children, grandchildren, and great-grandchildren. A parent selling a car to their daughter for $3,000 owes no sales tax; the same sale to a friend would be taxable.2Tennessee Department of Revenue. Affidavit of Non-Dealer Transfers of Motor Vehicles and Boats
Gifts to Friends or Anyone Outside the Family List
Gifting to a friend, neighbor, or anyone outside the exempt family list is still sales-tax-free as long as it is a true gift with no exchange of money, property, or services. The Affidavit documents that for the clerk. If the state later concludes the “gift” was really a sale, it can assess tax on the vehicle’s fair market value.
The exemption only covers sales tax. Title, registration, plate, and county fees are still owed.
At the County Clerk’s Office
The recipient (and ideally the donor too) should visit a local county clerk’s office in person with the signed title, the completed Affidavit, the odometer disclosure, IDs, and residency proof.6TN.gov. Titling a Vehicle
If the recipient already has Tennessee plates on a car they’re getting rid of, those plates can move to the gifted vehicle. Bring the current registration for the old car; some clerks charge a small extra fee if you can’t produce it.
Once the paperwork is submitted and fees are paid, the clerk issues a temporary registration on the spot. The Department of Revenue reports that most permanent titles are mailed within 24 to 48 hours of processing.7Tennessee Department of Revenue. VTR-4 – When Title Can Be Expected in the Mail
Fees to Budget For
The state registration fee for a passenger plate is $26.50, with a separate state title fee on top.8Tennessee Department of Revenue. VR-4 – Registration Fees Counties add their own processing charges, and amounts vary. Transferring an existing plate is much cheaper than buying a new one: roughly $20 to $25 for a plate transfer versus $100 or more for a new plate and title combined, depending on the county.
Many Tennessee counties also charge a wheel tax on registration, running anywhere from $10 a year to $100, and some counties charge none at all. Call your clerk’s office before you go so the total doesn’t catch you off guard.
What the Donor Should Do After Signing Over the Car
Your registration on the gifted vehicle becomes void when ownership transfers. You have two options with your old plates: move them to a replacement vehicle you’re registering (a $1.00 state transfer fee plus a clerk fee), or surrender them at the clerk’s office.9Justia. Tennessee Code 55-4-101 – Registration Required Before Operation Do not leave your plates on a vehicle you no longer own. If the new owner is in a crash or picks up toll violations while your registration is still attached, the cleanup is on you.
Keep copies of the signed title, the Affidavit, and any receipt the clerk hands you. Those are your proof of when ownership actually changed hands.
What the Recipient Needs to Do
Tennessee law requires liability insurance on every vehicle operated on public roads. Under a split-limit policy the minimums are $25,000 for bodily injury or death per person, $50,000 for bodily injury or death per accident involving two or more people, and $25,000 for property damage per accident. A single-limit policy satisfies the requirement at $65,000 or more per accident.10Justia. Tennessee Code 55-12-102 – Part Definitions Coverage must be in place before the vehicle is driven. Driving uninsured in Tennessee brings fines and potential license suspension.
If plates weren’t transferred at the title appointment, the recipient will need to pick up new ones from the clerk. Keep the temporary registration visible in the car until the permanent plates and title arrive in the mail.
Federal Gift Tax on a Vehicle
Most car gifts won’t trigger any federal filing. The IRS allows each person to give up to $19,000 per recipient in 2026 with no reporting obligation.11Internal Revenue Service. What’s New – Estate and Gift Tax If the car’s fair market value is higher than that, the donor files IRS Form 709 to report the gift. Filing doesn’t necessarily mean you owe tax; the excess simply reduces your lifetime gift and estate tax exemption, which sits above $13 million. Skipping the form when it’s required is a compliance problem worth avoiding.12Internal Revenue Service. Instructions for Form 709
Married couples can split gifts. If both spouses agree, they can effectively give $38,000 to one recipient before a filing is required. If they elect to split, both spouses must file Form 709, even if neither half exceeds $19,000 on its own.