How does gifting a car work?

Gift of a car due to lack of space

Article 618 of the Civil Code defines gifts as “an act of liberality by which a person gratuitously disposes of a thing in favor of another, who accepts it”. It is any delivery of goods without consideration. That is to say, when you give something to another person, be it money, a house, shares, an investment fund or, in the extreme, even a wedding gift.

Donations are settled in the community in which the donee resides, who receives the money, and not from the one who donates it. If a father in Castilla y León helps his son who lives in Madrid with money, the tax will be paid in Madrid.

You have a period of one month to pay the gift tax from the date of the donation. Unlike an inheritance, in this case you do not have to pay before receiving the money or goods, so you can use part of it to pay Hacienda.

When choosing between leaving something in inheritance or donating it, the general rule says that it is better to inherit than to donate, since the taxation for the inheritance part is better than that of donations, although there are exceptions. The key is to study the bonuses that are applied in the autonomous community of the person receiving the money. For example, in Madrid, thanks to the 99% reduction for lifetime donations between parents and children, the issue is very even.

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How to give a surprise car as a gift

Want to buy a car? Besides paying cash, you have other options. Whether you finance your car purchase or lease it, here are some things to keep in mind.

Many lenders offer long-term loans, such as 72 or 84 months. While these loans can lower your monthly payments, they may have high interest rates. And the longer the loan period, the more expensive the loan will be overall. Cars lose value quickly once they leave the dealership, so with long-term financing, you may end up owing more than the car is worth.

Ask questions about the terms of the contract before you sign it. For example, before you drive away from the dealership, ask: Are the terms of the contract final and fully approved? Does the price on your contract match the price the dealer sent you in advance? And if the dealer says he’s still working on approval, that means the deal is not yet final. Consider waiting to sign the contract, and keeping your current car, until the financing is fully approved.

You can give a car as a gift

Attention, question: how much do you have to pay to the IRS if you win a car? As you probably already know, any prize won in a sweepstakes or contest entails payment to the IRS. In fact, you’ve probably heard of someone turning down a prize like a car, or even needing it, selling it. And it is in the taxes that this entails where the reason lies.

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How much tax do you have to pay if you win a car in a contest? In this case, the tax is high; several thousand euros. The problem is that, if you do not have that cash, the gift can be a problem, so the solution has to be to sell it or even refuse it.

If you have won money or an article (including a car) in a TV, radio, Internet, or any other kind of contest, the amount to be paid to the Treasury is 21% of the prize (note that it is different with respect to the State Lottery, Bonoloto, Once, the Red Cross, or any other draw of the State, Autonomous Community, or charity association).

Gifts for a man’s car

Extra warmth in the car is never a waste, especially if you’re parked on the street and the outside temperature is very low. This heating pad is perfect for those days: it covers the seat by adjusting with an elastic strap and plugs into the 12V/24V cigarette lighter socket. In just three minutes, the cushion reaches the desired temperature – low, medium or high – switching off automatically after 50 minutes of use // Price: €36.99.

This 2″ LCD camera records everything that happens on the road. It is installed on the dashboard with adhesive or suction cups and connects automatically when the engine is started. It records high quality videos – also in low light conditions – thanks to its 170° wide-angle lens. It has an emergency recording mode, which is triggered by sharp turns or sudden stops // Price: €54.99.

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Avoid carrying the rear area of the car full of loose objects using this practical organizer. It is placed on the back of the front seats and, thanks to its eight versatile pockets, you can store everything you need. It also has a sturdy folding tray and is made of leather fabric, which makes it easy to clean and maintain. // Price: 14.87 euros.