Transferring A Vehicle To Your Child And Getting Them Insured
Transferring a vehicle to your child and getting them insured is easy. However, if the teen driver has a title registered under their name, they will need to go on their own auto insurance policy. Learn this and other ways to save on auto insurance, whether you transfer a car title to your child or not, including shopping around and asking about discounts.
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UPDATED: Apr 23, 2022
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- Transferring a car title from parent to child requires that the vehicle is listed under their name and then the title can be transferred
- You don’t normally have to add a child to your policy while they’re still driving on a learner’s permit. However, you have to add them as soon as they get their full license. Auto insurance for teenagers is typically very expensive if they get their own policy
- If you purchase a vehicle in your own name and still live at home, you will still have to purchase your own policy if your name is on the registration
There are many things to worry about once your child is old enough to drive legally. Their safety behind the wheel is probably the most nerve-racking thought during this time. There is also a whole slew of legal hoops to jump through that may also weigh on your mind as you prepare your child for life behind the wheel.
Transferring a vehicle to your child and getting them insured is doable but requires a few things. Understanding auto insurance, the process for transferring a vehicle title, and auto insurance rates for teenage drivers are just a few of the pieces of information you need to know. Let’s take a look at that.
After transferring a car title to your child and insuring them, you’ll find auto insurance for teens may cost more depending on age, where you live, and what car they drive. Read this guide to review the title transfer process – even to those in another state and through inheritance.
Whether you need to insure a child to whom you transferred your vehicle, or you need to get the best auto insurance for your needs, enter your ZIP code in our tool to get free auto insurance quotes from multiple insurers.
How do I transfer car ownership to my child?
If you plan on getting your teen set up with a car to drive and want the vehicle to be listed under their name, you will need to transfer the car title to your child.
A car title is a document that legally establishes who owns the vehicle. To transfer the title to their name, you’ll need to go to your local Department of Motor Vehicles and proceed from there.
How does a title transfer work?
In most states, if you are purchasing a vehicle for your child, you will need to have a vehicle bill of sale.
This is a document that outlines the terms and conditions of the purchase of the vehicle. This document will include the purchase price, the make, model, and year of the vehicle, the vehicle identification number (VIN), the warranty, and the odometer reading at the time of purchase.
It also includes the addresses of both the buyer and the seller. If you are the buyer but are purchasing the vehicle for your child, you will need to have the name of the child on the bill of sale as well.
A bill of sale represents the legal transfer of the right to ownership of the vehicle. Once the bill of sale has been signed, the buyer will need to visit the DMV to apply for a title to transfer the vehicle to their name or their child’s name.
Whose name is listed on the vehicle title?
Before you transfer an auto title, be sure to check the names listed on your vehicle’s title. If you’re the sole name listed, you’re free to continue the process. However, if your loan lender is listed, you’ll need to take care of the loan before relinquishing the title.
When visiting the DMV for a title transfer, you should be prepared to pay a transfer fee and possibly a smog certification or other form of emissions test, depending on the state or city that you live in.
How do I transfer ownership of a car to a family member?
Let’s look at how to transfer a car title to a family member.
Even if you transfer vehicle ownership from yourself to your child, almost all of the same vehicle title transfer regulations and procedures will apply. The one difference is that the person receiving the vehicle will typically not have to pay the sales tax for the vehicle.
Parents, grandparents, spouses, children, siblings, partners, and grandchildren are all considered eligible for a “family” title transfer. The rest of the transfer process is the same as if you were buying or selling a vehicle.
When transferring vehicle ownership to your child, it is important to contact your state’s DMV for specific regulations and procedures, as the laws vary from state-to-state.
How do I transfer ownership of a car to a family member in a different state?
Now let’s look at how to transfer a car title to a family member in a different state.
First of all, can you transfer a car title to a family member in a different state?
Yes, you can, and it’s usually a pretty straight-forward process. You’ll need to contact both your local DMV and the DMV in the state in which your family member lives to make sure you have the appropriate documentation in place.
How does car inheritance work?
Here’s how to receive a car through inheritance.
If your child or teen inherited your vehicle or from one of your family members, you’ll need to fill out some paperwork in order to properly complete the transfer. This process is a bit different from how you would put a car in your name. In this case, an Affidavit of Heirship for an automobile is required.
Your state may also tax you on your inherited property — though most states do not. Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania, all impose a tax on inherited property.
Also, keep in mind that you may need to pay a sales tax upon registration depending on your state.
So, your child or family member is all set up with the title transfer. Now what? Time for insurance.
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How do I start the title transfer?
When you’re wondering how to transfer a car title from parent to child, the first step is to list the vehicle under their name. Once you’ve done that, you can start the title transfer process.
Fortunately, you typically won’t have to worry about insuring your teen driver while they hold a learner’s permit. But once they’ve earned their full license, they’ll need insurance (either added to your existing policy or purchasing coverage themselves).
If your teen’s vehicle is solely in their name, they will need their own insurance policy.
Whether your teen purchases their own coverage or you add them to your existing policy, there are things you can do to save money, including shopping around and asking about discounts.
Should I insure my teen driver?
Another thing to consider when you transfer the ownership of a vehicle to your child is the insurance. Adding a child to your auto insurance policy may be a bit scary because not only is your child going to be behind the wheel, but you are also looking at an increase in the cost of your coverage.
What are average auto insurance rates for teens?
When adding a teen to your insurance policy, you can expect your rates to go up. This is because teens are some of the highest-risk drivers on the road, and an auto insurance company is taking on a bigger risk when they insure a teen.
This table shows average rates for teen and young adult drivers from the major insurers across the country.
|Companies||Average Annual Rates for a Single 17-Year-Old Female||Average Annual Rates for a Single 17-Year-Old Male||Average Annual Rates for a Single 25-Year-Old Female||Average Annual Rates for a Single 25-Year-Old Male|
Overall, transferring a vehicle to your teen is a fairly simple process that will involve a trip to the DMV to fill out the necessary paperwork. Adding your child to your auto insurance policy will involve a bit of research into different insurance policies available and choosing one that works best for your budget and needs.
What risks do teen drivers face?
As we noted, teens are higher-risk drivers. Why? Because teen drivers have less experience on the road. The less experience someone has on the road, the higher their chance of being in some traffic incident.
As teens get older (and therefore have spent more time on the road), they are perceived as lower-risk (assuming they’ve kept a clean driving record), and their auto insurance rates will decrease.
Are there gender-based auto insurance rates?
While it’s not legal in every state to use gender as a factor in adjusting rates (states like California have made this practice illegal), this is still fairly common in most of the country. And in many cases, it means males will pay more for coverage than females, particularly at younger ages.
This proves true in looking at the rates we listed earlier. In fact, on average, a 17-year-old male will pay 19 percent more than females of the same age, while by the time drivers reach the age of 25, the difference is only 7 percent.
Which auto insurance companies offer the cheapest coverage for teen drivers?
Auto insurance rates vary by state, but overall, GEICO, State Farm, and Nationwide offer some of the most affordable auto insurance rates for teenage drivers. All three companies offer discounts to young drivers, as well, which helps to manage rates.
When should you add your teen to your auto insurance?
Most auto insurance companies do not require you to formally add a teen driver to your policy until they are a fully licensed driver. This means that you typically do not have to add your teen while they only have a learner’s permit.
However, if you have a teen with a learner’s permit, you should still notify your auto insurance provider, as there might be specific regulations put in place by the company you will need to follow.
When your teen becomes a licensed driver, you will need to have them added to your current insurance policy or buy a separate insurance policy for them. Typically, parents will choose to add a child to their current policy, as this is often the cheaper option for teen auto insurance.
If your teen is driving an older, used vehicle, you may be able to just get liability-only coverage on that vehicle to save money. The Insurance Information Institute highlights these state auto insurance requirements, which we’ve summarized in this table.
|States||Auto Insurance Requirements||Minimum Auto Insurance Liability Limits|
|Alabama||BI & PD Liab||25/50/25|
|Alaska||BI & PD Liab||50/100/25|
|Arizona||BI & PD Liab||15/30/10|
|Arkansas||BI & PD Liab, PIP||25/50/25|
|California||BI & PD Liab||15/30/5|
|Colorado||BI & PD Liab||25/50/15|
|Connecticut||BI & PD Liab, UM, UIM||25/50/20|
|Delaware||BI & PD Liab, PIP||25/50/10|
|District of Columbia||BI & PD Liab, UM||25/50/10|
|Florida||PD Liab, PIP||10/20/10|
|Georgia||BI & PD Liab||25/50/25|
|Hawaii||BI & PD Liab, PIP||20/40/10|
|Idaho||BI & PD Liab||25/50/15|
|Illinois||BI & PD Liab, UM, UIM||25/50/20|
|Indiana||BI & PD Liab||25/50/25|
|Iowa||BI & PD Liab||20/40/15|
|Kansas||BI & PD Liab, PIP||25/50/25|
|Kentucky||BI & PD Liab, PIP, UM, UIM||25/50/25|
|Louisiana||BI & PD Liab||15/30/25|
|Maine||BI & PD Liab, UM, UIM, Medpay||50/100/25|
|Maryland||BI & PD Liab, PIP, UM, UIM||30/60/15|
|Massachusetts||BI & PD Liab, PIP||20/40/5|
|Michigan||BI & PD Liab, PIP||20/40/10|
|Minnesota||BI & PD Liab, PIP, UM, UIM||30/60/10|
|Mississippi||BI & PD Liab||25/50/25|
|Missouri||BI & PD Liab, UM||25/50/25|
|Montana||BI & PD Liab||25/50/20|
|Nebraska||BI & PD Liab, UM, UIM||25/50/25|
|Nevada||BI & PD Liab||25/50/20|
|New Hampshire||FR only||25/50/25|
|New Jersey||BI & PD Liab, PIP, UM, UIM||15/30/5|
|New Mexico||BI & PD Liab||25/50/10|
|New York||BI & PD Liab, PIP, UM, UIM||25/50/10|
|North Carolina||BI & PD Liab, UM, UIM||30/60/25|
|North Dakota||BI & PD Liab, PIP, UM, UIM||25/50/25|
|Ohio||BI & PD Liab||25/50/25|
|Oklahoma||BI & PD Liab||25/50/25|
|Oregon||BI & PD Liab, PIP, UM, UIM||25/50/20|
|Pennsylvania||BI & PD Liab, PIP||15/30/5|
|Rhode Island||BI & PD Liab||25/50/25|
|South Carolina||BI & PD Liab, UM, UIM||25/50/25|
|South Dakota||BI & PD Liab, UM, UIM||25/50/25|
|Tennessee||BI & PD Liab||25/50/15|
|Texas||BI & PD Liab, PIP||30/60/25|
|Utah||BI & PD Liab, PIP||25/65/15|
|Vermont||BI & PD Liab, UM, UIM||25/50/10|
|Virginia||BI & PD Liab, UM, UIM||25/50/20|
|Washington||BI & PD Liab||25/50/10|
|West Virginia||BI & PD Liab, UM, UIM||25/50/25|
|Wisconsin||BI & PD Liab, UM, Medpay||25/50/10|
|Wyoming||BI & PD Liab||25/50/20|
To clarify the information in this table, we’ve defined all the acronyms and abbreviations.
|PD||Property Damage Liability|
|PIP||Personal Injury Protection|
If you feel your teen needs more than the minimum liability coverage required by your state, you can speak with your insurance provider about adding coverages like collision and comprehensive to the policy.
Why do you need to add your teen to your auto insurance?
As we’ve already described, your teen driver needs insurance once they are fully licensed (it’s not typically required with a learner’s permit) to meet mandatory coverage requirements in your state. However, you don’t have to add your teen to your policy, as they also have the option to purchase their own.
If you add your teen to your policy, you can expect your rates to increase by over 160 percent, but their rates will be even higher if they purchase their own policy.
How long can your teen stay on your auto insurance policy?
Your child can remain on your auto insurance policy for as long as you (and they) would like. However, once they’re living on their own, they should purchase their own policy because even if it’s not intentional, staying on your insurance policy while living elsewhere can be perceived as insurance fraud.
How can I find affordable teen auto insurance?
There are a few ways teen drivers can reduce their rates, including following all posted traffic laws and driving safely at all times. Additionally, they can take a defensive driving course, which may result in some discounts.
When it’s time to add your teen to your insurance, it may be a good time to shop around for a new policy. Before you buy auto insurance for a teenage driver you should get quotes from several insurance companies to see which one will offer the best deal.
When shopping for your teenage driver’s insurance, you can check prices for a separate policy for your teen. In most cases, you will find that it’s cheaper to add them to your current policy or purchase an entirely new policy with another company, which includes all your household drivers.
Many insurance companies also offer a variety of discounts to their insureds. Take a look at this table to see available discounts by major company.
|Discounts||21st Century Auto Insurance Discounts Offered||AAA Auto Insurance Discounts Offered||Allstate Auto Insurance Discounts Offered||American Family Auto Insurance Discounts Offered||Ameriprise Auto Insurance Discounts Offered||Amica Auto Insurance Discounts Offered||Country Financial Auto Insurance Discounts Offered||Esurance Auto Insurance Discounts Offered||Farmers Auto Insurance Discounts Offered||GEICO Auto Insurance Discounts Offered||Liberty Mutual Auto Insurance Discounts Offered||MetLife Auto Insurance Discounts Offered||Nationwide Auto Insurance Discounts Offered||Progressive Auto Insurance Discounts Offered||Safe Auto Auto Insurance Discounts Offered||Safeco Auto Insurance Discounts Offered||State Farm Auto Insurance Discounts Offered||The General Auto Insurance Discounts Offered||The Hanover Auto Insurance Discounts Offered||The Hartford Auto Insurance Discounts Offered||Travelers Auto Insurance Discounts Offered||USAA Auto Insurance Discounts Offered|
|Adaptive Cruise Control||No||No||No||No||No||No||No||No||No||No||Yes||Yes||Yes||Yes||No||No||No||No||No||No||No|
|Daytime Running Lights||Yes||Yes||Yes||Yes||Yes||No||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes||No||No||No||Yes||Yes||Yes||Yes|
|Electronic Stability Control||No||No||Yes||Yes||No||Yes||Yes||No||Yes||No||Yes||Yes||Yes||Yes||No||No||No||No||No||No||No||No|
|Lane Departure Warning||No||No||No||No||No||No||No||No||No||No||Yes||Yes||Yes||Yes||No||No||No||No||No||No||No||No|
|Forward Collision Warning||No||No||No||No||No||Yes||Yes||No||No||No||Yes||Yes||Yes||Yes||No||No||No||No||No||Yes||No||No|
|New Customer/New Plan||No||No||No||No||No||No||No||No||No||Yes||Yes||No||No||Yes||No||No||No||No||No||No||No|
|On Time Payments||No||No||Yes||No||No||No||No||No||No||No||No||No||No||Yes||No||No||No||No||Yes||Yes||No|
|Seat Belt Use||No||No||No||No||No||No||No||No||No||Yes||No||No||No||No||No||No||No||No||No||No||No||No|
|Students & Alumni||No||No||No||Yes||No||No||No||Yes||No||Yes||Yes||Yes||Yes||No||No||No||No||No||No||No||No||No|
Speak with your insurance agent to determine if any discounts can be applied to your policy to reduce your teen driver’s rates. Good student discounts are one example that can save up to 25 percent on insurance.
As you can see, while insurance for teens will still be expensive, there are things you can do to decrease your rates and make them more affordable.
Frequently Asked Questions: Transferring a Vehicle
Still, have questions about transferring a car title from parent to child? Read these frequently asked questions for more.
#1 – What happens if I don’t add my child to my auto insurance?
Do I have to add my child to my auto insurance? If your child is driving any of your vehicles, they will need to be added to your policy. If they’re uninsured, that is both illegal and bad news if they get into an accident.
If a teenager has to get their own auto insurance policy, their rates will be significantly higher than being added to yours.
Can I drop my child from my auto insurance? You can but only if they won’t be driving your cars.
#2 – Is it better to gift a car or sell it for $1?
Generally, it’s easier and better to gift your vehicle through the DMV. Read more about this at question #8.
#3 – Can you be on your parents’ auto insurance if you don’t live with them?
Can you get auto insurance for a child not living at home? There may be some exceptions for college students. But, if you just moved out you probably can’t stay on your parents’ auto insurance. One reason is that your insurance needs to be at the same address as the vehicle is parked.
You don’t want to lie about where you live to get a better rate because that constitutes insurance fraud. Insurance fraud costs insurers $7.7 billion every year, which gets passed onto the consumer. On top of that, you can be heavily fined and even face jail time.
#4 – Can you transfer a car title from business to personal?
Just like a car title transfer from person-to-person, you can transfer a vehicle from business to personal. However, you’ll have to get the owner of the business to sign the title over to you.
#5 – Is it better to put a car in your child’s name?
When asking, “should I title a car in my child’s name?” it depends. If a vehicle is registered in the child’s name, they will need their own insurance policy. They can’t be on your policy if your name is not on the car’s registration.
#6 – Can I be on my parents’ auto insurance if the car is in my name?
If you’re living at home and driving their vehicle, you can certainly remain on their auto insurance. But, if you go and purchase the car yourself, you’ll have to get your own separate policy.
#7 – Can I transfer a car title online?
Many states do have some title transfer services online. Check your state’s DMV website to see what options they have.
#8 – Can I just sign a car title over to someone?
When you sell a car to someone, both you and the buyer will need to sign the title to complete the transaction. If you want to gift or give a car to a family member, there are still very specific processes you’ll need to follow. Be certain to inquire about gift taxes, if that applies in your state.
In either case, you will likely need to include other information such as the odometer reading at the time of the sale. However, the process varies from state-to-state. Some states may require witnesses or a notary to validate the sale. Your state’s DMV will have all the information you need.
If you’re looking to add your teen onto your auto policy or if you’re searching for better coverage, the best thing to do is to check around. Comparing rates is the best way to find a cheap auto insurance company for teenage drivers.
We can help with that by providing multiple free auto insurance quotes for teenage drivers from multiple insurers. If you’re ready to buy auto insurance, enter your ZIP code in our tool to get started and compare auto insurance quotes.