by 316pav » Thu May 28, 2015 06:53 pm
My 16 years old granddaughter just got her driver's licence and was added to her parents insurance policy.
Her parents do not have a car for her. I do, have an old unused car, insured by my policy.
What should I do,
1. Formally give this unused car to my daughter (the granddaughter's mother), or
2. Just allow my granddaughter use the car without formally transfer the car to her parent;s family?
Thank you,
Her parents do not have a car for her. I do, have an old unused car, insured by my policy.
What should I do,
1. Formally give this unused car to my daughter (the granddaughter's mother), or
2. Just allow my granddaughter use the car without formally transfer the car to her parent;s family?
Thank you,
Posted: Wed Jun 03, 2015 11:04 am Post Subject:
What should I do
Well, it depends on whether you want to be liable for the damage your inexperienced driver-granddaughter does to someone else or their property. Which is what you obligate yourself to by simply allowing your granddaughter to "use" your car. You would have to add her as a named driver on your insurance policy and could expect your premium to at least double.You can gift the vehicle directly to your granddaughter, if you choose, or to her parents. Makes relatively little difference other than who is on title. A 16-year old child is unlikely to obtain auto insurance on her own, and will need to be insured under her parents' policy.
Or you can let your 16-year old granddaughter learn to work and save and buy her own car and be responsible for her own insurance. Most 16-year old new drivers do not "need" their own car -- new, used, or parents'.
Posted: Mon Aug 24, 2015 04:47 pm Post Subject: Insurance AND Tax Implications
In the event you gift or give away the car, there are tax implication your grand daughter will assume and, unless she has a job, she may not even been able to pay a couple hundred dollars of tax. I recommend you keep the car in your name and add her to your insurance policy. The flip side to that, of course, is in the event of the accident you are liable.
Posted: Fri Aug 28, 2015 08:45 pm Post Subject:
There is, in all states as far as I know, no tax implications to the recipient when a family member gifts a vehicle. The person who makes the gift is exposed to federal Gift Tax liability if the gift is valued at more than about $13,000 in 2015. Grandma and Grandpa could combine their gift and avoid tax on up to about $26,000 of auto.
Add your comment