Advice needed re my mother giving car to my teen

[Dee18]

My mother 's doctor has told her that she needs to quit driving due to poor vision.  My mother who lives in State A wants to give the car to my 19 year old daughter who is attending college in State A.  I live in state B, 500 miles away.  The car is great...a 2011 Honda civic with 7200 miles! My daughter has been driving 4 years with no accidents or tickets and attends a small college on a full tuition scholarship in a very small town, so I am okay with this gift (though still nervous!).  I started to research this, but thought someone on MMM might know the following.  Will it be cheaper to insure if I add this car to my insurance?  (This might be good as I have a 1M umbrella policy).   Since my mother will not be driving again, she is dropping all insurance.  To put on my insurance, do I need to be the registered owner?  And, more simply, what do we do to actually transfer title?  Since DD's permanent  address is still with me in state B, I'm guessing we need to license it in state B anyhow (unfortunate as state B has property tax on cars and State A does not.). Do we have to pay a sales or transfer tax when it's a gift?

Thanks in advance for any advice.  I must say I cried after I got off the phone with my Mom; it us so hard to see her lose her independence.  But she is a great role model; she said, "it's sad, but I can't complain.  I've had a great run."  May we all say the same some day. 

[pbkmaine]

Just call your auto insurance company and ask these questions.

[mskyle]

It probably also depends on what State A and State B are, and even possibly whether your daughter lives on or off-campus. Definitely ask the insurance company (if you have a real person insurance agent, even better!).

[lbmustache]

- It will probably be cheaper to add her to your insurance than insuring it on her own because she is young. I know my insurance offers a family discount so yours might too.

- Either you or your daughter need to own the car to put it on your insurance since your mother is dropping insurance.

- Title transfers vary by state. You may have to pay state tax depending on how you do it. My parents transferred me the car under a "gift" provision and there's no tax in CA under that method. http://www.dmv.org/articles/gifting-cars-and-paying-taxes/

[Dee18]

Thanks!  I called my insurance company and, as suggested, it is cheaper to have her on my insurance but the car can be registered in her name. (For those interested, my insurance will double.)  Unfortunately, the registration is a convoluted project in my state but at least I won't be the one waiting in the required multiple lines.

[Gin1984]

Thanks!  I called my insurance company and, as suggested, it is cheaper to have her on my insurance but the car can be registered in her name. (For those interested, my insurance will double.)  Unfortunately, the registration is a convoluted project in my state but at least I won't be the one waiting in the required multiple lines.

My mom made me pay my own insurance (though she did pay the first 6 months to get me started because like your daughter, the car was a surprise gift (though your daughter got a much nicer car, lol).  She took the multi-car discount though and saved herself some money.  Maybe, don't do that but have her pay something towards your costs.  I mean she is going to be working for gas and repairs might as well expect insurance too.

[Rosy]

Glad you called your own insurance company for clarification. The only suggestion I have that might save you a bit of money is: Here in Florida you can get a 10% discount if you have a safe driving certificate.
They have a one day class at a local college and then hand you a certificate, which you e-mail to your insurance company for 10% off your premium.

[Bob W]

Next suggestion is to bid out the insurance through an independent insurance company.  Also insurance rates can vary significantly by state and location.  For instance Detroit has extremely high insurance and Georgia appears low.

So yeah bid it out but also check to see it the car and young driver are cheaper in her state.   

You also have an umbrella coverage policy.  These are law suit magnets in my opinion. 

Why?  Are you wealthy?  (not counting retirement sheltered funds) 

With umbrella coverage you are usually required to have full coverage with a relatively low deductible.    Your daughter may be able to get away with $1,500 deductible from a cheap insurer in her state cheaper than you can?

Of course she could just go liability/uninsured motorist policy only as well.  But I'm guessing even if you are rich you don't want to roll the dice on the 10K.

 

[GizmoTX]

We get a discount on auto insurance for DS having excellent grades in college. He's on our policy & reimburses us; his cost would double if it was in his name.

[Dee18]

Thanks all!
Gin1984-I have been debating how much of the cost to cover.  I really agree with your mother, but I think I'm going to let DD use money out of her 529 account for it, since she has a full tuition scholarship and won't need all the money in the account.  (Since she has the scholarship, she can take out money and use it for other purposes without paying the 10% penalty.  She just has to pay taxes on it.) She's taking a tough schedule at a challenging college so I definitely don't want to make her get a job during the first academic year....maintaining her scholarship is so valuable.

Rosy-yes.  Those one day courses are so worth it!  DD did a safety course so she has that discount, good grades discount, and a three years safe driving record discount.  Let's hope it stays that way with her own car!

BobW.  I will do a little more comparison shopping.  That's a great idea.  But I like having the umbrella policy to protect my non-IRA stash. Also retirement accounts in many states are not fully protected. If I do get sued I'd be happy to have the insurance company handle it and settle the suit within the limits of the umbrella.  That's worth $100/ year to me. 

[Gin1984]

Thanks all!
Gin1984-I have been debating how much of the cost to cover.  I really agree with your mother, but I think I'm going to let DD use money out of her 529 account for it, since she has a full tuition scholarship and won't need all the money in the account.  (Since she has the scholarship, she can take out money and use it for other purposes without paying the 10% penalty.  She just has to pay taxes on it.) She's taking a tough schedule at a challenging college so I definitely don't want to make her get a job during the first academic year....maintaining her scholarship is so valuable.

Rosy-yes.  Those one day courses are so worth it!  DD did a safety course so she has that discount, good grades discount, and a three years safe driving record discount.  Let's hope it stays that way with her own car!

BobW.  I will do a little more comparison shopping.  That's a great idea.  But I like having the umbrella policy to protect my non-IRA stash. Also retirement accounts in many states are not fully protected. If I do get sued I'd be happy to have the insurance company handle it and settle the suit within the limits of the umbrella.  That's worth $100/ year to me.

I think your plan is great!  Scholarships are the most important.  You also could require her to apply for small time scholarship for the car costs in addition to pulling money.  Btw, she should not need to pay taxes on it if she is using it for living expenses (under the cost the school defines as living expenses).  You can pull money out of a 529 for living expenses for a full time college student.