Do People Really Give Cars As Gifts?

Lexus-bowtie
The Budweiser Clydesdales and Coca-Cola’s Santa may have seemingly co-opted Christmas for marketing gain, but when car companies do it, it can still feel stilted. It’s hard to believe that some people are bequeathing five- or six-figure vehicles to one another for the holidays — with giant bows nonetheless. But according to Consumer Research, some people, in fact, do.

It may surprise you, but an estimated 14,994 new cars are expected to be given as gifts this season.

The number looks big, but out of a projected 980,000 new vehicles expected to be sold in December, these pricey presents make up only about 1.5% of all car sales. The number of people giving cars as gifts has gone down during the recent economic downturn. CNW Marketing Research says the peak of car gift giving happened in 2005, when 138,269 new and used cars were given.

The folks dishing out the dough for a gift like this are typically 30 to 60 years old and earn more than $100,000 a year, according to USA Today.

Gifters sometimes even use the big bow to give away their vehicles, too. Consumer Research says the bows are typically purchased by dealerships, but consumers can get the big magnet ribbon for $25 to $40.

It’s important to note that if you plan on gifting a vehicle, you should research your state’s tax code first. You could end up giving your recipient a burden rather than a reward.

Never Mind the TV Commercials, Do People Really Give Cars as Gifts? (Consumer Research)

By Colin Bird | December 21, 2010 | Comments (8)

Comments 

Wow out of the 1.5% that have received vehicle for Christmas I don't think that I am not in that percentage. I think 1.5% is still a good number seeing that the economy was down. Maybe by next Xmas the number is double or triple if the economy gets back to normal.

Andrey

Just out of curiousity; how do taxes work if you gift a car in Illinois? Let's say I go purchase a car for $15,000 after taxes and registration. Gift it to someone. Does that person then have to pay the 40%, or whatever it is, gift tax?

If I'm spending that much on a Christmas gift, the dealership better provide the bow for me at no additional cost.

L

I only heard of one person I knew doing this and it didn't really count in my mind as they just made the downpayment so the gift receiver got the keys and a payment booklet!

My question is how do you follow it up? If you buy someone a car one year, you can't get away with only getting them slippers the following year! :-)

BIG


Federal Tax allows a gift tax exemption up to $13,000 per year (currently).

If you add a person to your vehicle title the state sees it as a sale and you pay the taxes on book value of that vehicle.
However, in states like NY when a vehicle is "transfered" or "sold" to a family member there is a form to fill out for tax exempt status. This would not work if you bought it for a friend. It seems when he goes to title/ register it he will have to pay sales tax on the vehicle with the state.

Hybrit

If I didn't like my spouse I would buy them a stinking clattering audi diesel.

DL

A couple of years ago a Boston Lexus dealer actually ran out of those giant red bows ... Of course you can argue some may not have been gifts .... :)

That's a ridiculously high number. That is a lot of cars to be given as gifts. I don't know a single person who has gotten a car for Christmas, so these statistics seem a bit high to me, but what do I know!

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