How old a teenager must be to legally hold title to a car depends on the state and other factors such as whether the teen is licensed to drive. Check your state's laws on the age to have a car title in your name and follow the local procedure to assign title to the car's proper owner if that's possible. If a teen wishes to drive and can't legally own a car, you may wish to keep the title in a parent or guardian's name until the teenager is old enough to legally own the car.
Understanding Your Car Title
A car title is a legal document stating who owns a vehicle, usually identifying it by its make, model and vehicle identification number. The title is issued by a state's Department of Motor Vehicles, or an equivalent agency, and is necessary if you want to sell the car or transfer it to a new owner.
The exact legal requirements for a car title and what you have to do to get one and transfer one varies from state to state. Some states may require that you submit a bill of sale or other transfer paperwork to transfer the car legally from one owner to another. The owner getting rid of the car is often required to sign the old title document over to the new owner. You may need to file a change of residency form or similar documents if you are moving the title from one state to another.
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Check with your state to see what papers you need to get and transfer a car title. Make sure you have your documents in order before you go to the motor vehicle office so you don't wait in line only to find that you must come back another day.
Teen Ownership of Cars
Some states restrict minors from owning cars under certain circumstances. A minor is usually anyone who hasn't yet turned 18, so teens who are 18 and 19 are usually legally adults and can own cars and hold legal title to them the same as older adults.
Whether and how a minor can own a car varies from state to state. Some states don't restrict minors from owning cars or any other property while others require that the car be held for the minor by a legal guardian or another adult. States like California ban car dealers from selling to minors who don't hold valid driver's licenses. If you want to put a minor on a car title, you must check your local state law to see whether this is valid and if there is an age limit to buy a car even if you can own one at a lower age.
You may also have difficulty getting a car dealership to allow a minor to complete all the paperwork for a car purchase, particularly if the vehicle is financed. In many states, minors have considerable latitude to void contracts they have entered into, which naturally makes people wary of entering into deals with them to pay off a car loan.
Adults Owning the Car
To ease the legal process, you may want to put cars and any related loans in the name of a parent, guardian or another responsible adult until a teenager turns 18. Make sure you understand the legal ramifications of this in terms of liability for loans, insurance and other requirements.
Also, keep in mind that you may want to have the adult own the car until the minor turns 18. If you intend to transfer the title to the teenager later on, remember that you may incur state or federal gift tax when transferring vehicle ownership and will almost certainly have to do some paperwork at your local motor vehicle agency. Depending on your state, you may be able to have an adult own the car as a custodian for the minor to avoid some of these complexities.
You will also want to make sure the teen driver is properly insured to drive. Often this can be done through a parent's policy. State laws may also make parents liable if their teenage children get into collisions while driving.
