Do you need a bill of sale when you get a car for free?

Some states do require a Bill of Sale when transferring the title no matter the purchase price. In the states that do require a Bill of Sale, the process can be as simple as just writing "gift" to fulfill this requirement.

Each state has separate guidelines but a good number do require Bill of Sale documents in connection with any title transfer. The Bill of Sale confirms the price and description of the car, so the document can assist in any discrepancies in the future if the car was indeed a gift. In the states where a Bill of Sale is not required, only a Title Transfer is needed. Taxes on the gifted car also are treated differently state to state.