Advice needed Re Titling/Insurance for DC gift car (MD and NC)

[Anonymous]

Would like to buy young adult child a used, reliable Honda or Toyota.

Live in Maryland but our child will be using in North Carolina for one year but probably not more.

Would it be better to buy the car in Maryland or North Carolina (I think the taxes are cheaper there but obviously
it's more difficult to shop there plus I think we have more competition with lots of cars here).

Should I title it in child's name? The car might end up a year later in Maryland as my second car.

Any advice appreciated.

[Anonymous]

Just avoid the mistake I made many years ago. Parents bought a car my senior year in college. Kept it in their name for cheaper insurance. When I graduated I went to get a title where I was living. New state saw it as I was buying the car and needed to pay tax on it. The car was only1 year old so the bill was high. I should have changed the title in my parents state (still had old license as a student) and then moved it to new state.

[Anonymous]

Informative. Thank you!

[Anonymous]

Maryland. Keep it in your name if you are going to take it and if not, its easy in MD to transfer it over later on and very little cost.

[Anonymous]

Anonymous wrote:Just avoid the mistake I made many years ago. Parents bought a car my senior year in college. Kept it in their name for cheaper insurance. When I graduated I went to get a title where I was living. New state saw it as I was buying the car and needed to pay tax on it. The car was only1 year old so the bill was high. I should have changed the title in my parents state (still had old license as a student) and then moved it to new state.

Most states do not regard a transfer between immediate family members as a sale. It would be rare to have to pay tax on such a transaction.

As for titling it in one state and then subsequently retitling it in another state, that IS a taxable transaction in many jurisdictions. The amount is based on the value of the car.