* Gift Tax: If the car's value exceeds the annual gift tax exclusion (which changes yearly), the friend may need to file a gift tax return. This doesn't necessarily mean they'll owe taxes, but it's a reporting requirement.
* Title and Registration: The process of transferring the title and registration will vary by state. Generally, the friend will need to sign the title over to you, and you'll need to register the car in your name and pay any applicable fees.
* Financing: If the friend finances the car, that's a separate loan agreement between the friend and the lender. Your friend would be responsible for the loan payments. It would not be a gift until the loan is paid.
* Other Agreements: It's strongly recommended that you and your friend have a written agreement outlining the terms of the gift, especially if it's a significant amount of money. This protects both parties.
In short, while possible, it's a complex transaction with potential tax and legal considerations that should be discussed and handled properly.
