Buying a car for someone else is a good idea if you are financially able to do so and the person is in need of dependable transportation. Owning a car is a big responsibility. In addition to you figuring out if the person is responsible enough to own a car, you must take other things, such as maintenance and insurance, into consideration when you buy a car for someone else.
Think about the type and size of car the person can safely drive. For example, a new driver will usually feel more comfortable driving a small to medium sized car. A person who has a large family may need a large SUV or maybe even a van.
Try to find out what kind of car the person likes. You can ask that person what kind of cars she likes during a light conversation. This will give you a starting point to know what kind of car to buy for her.
Consider maintenance costs. If you are purchasing a vehicle for someone else, you should make sure that he will be able to afford the regular maintenance on the car. In some cases, the parts, such as tires, may be more than what that person can afford. Edmunds (see Resources) is one site that can help you do this.
Determine the insurance cost. When you buy a car for someone else, you need to figure out if she will be able to pay for the insurance. If you think she will be unable to afford the insurance, you may need to look into other options or you can consider paying the insurance yourself.
Find out the cost of sales tax and gift taxes in your area. These will need to be paid before the person will be able to get a number plate for the car. You may be able to donate the car to them without either of you having to pay taxes. Check with your local revenue office to find out if this is possible in your area.
Make sure that the person will accept a car from you. Some people may be too proud or humble to accept a car.
Never buy a car for a person without a valid driver's license. In some areas, the car will be impounded if that person is caught driving without a valid license.