Contests and gifts are both ways of obtaining a free car but can come with undesirable downsides. These options each make it possible to get a car without paying money for it. They may include obligations to forfeit time or pay taxes after receiving the car.Continue Reading
Game shows and giveaways each periodically give away cars as prizes but winners are required to pay taxes on these cars as if they were income. As reported by DailyFinance, prizes are valued at their highest possible price. Even if the same model of car is selling at a lower price through a dealership, the amount that is taxed is the highest possible price it could be sold for. An additional downside of contests is that they may be very difficult to win. The amount of time spent applying for entry repeatedly and studying how to win the game may be better spent earning money to purchase the car.
If one has a family member or friend who has a car they no longer need, they may consider giving it as a gift. Unless they're giving it to a charity, the person giving the car must consider taxes into the equation. According to The Nest, individuals and couples in the U.S. are only allowed to give up to a certain amount before it negatively affects the giver's tax deduction. The person giving one the gift may ask for some compensation in this instance. Alternatively, one's friend or family member may be giving one the car because it needs a significant amount of repair. Finally, if one receives a car as a gift, one may feel a sense of obligation to the giver that adds tension to the relationship.Learn more about Contests & Gambling