For many years, we've seen TV commercials showing luxury vehicles topped by huge crimson bows and presented as holiday gifts. But how do you pull it off without the special person knowing? Can you really purchase a car and get the title and insurance without your spouse getting tipped off? Actually, playing a car-gifting Santa should be fully within your capabilities, as long as you have decent credit and you get a little help from the elves at the auto dealership and insurance agency.
Financing and titlingYour dream of giving a vehicle as a gift won't become reality unless you can title the car and finance its purchase. Start by contacting the finance and insurance manager -- the "F&I guy" -- at the dealership where you want to make the purchase. Tell him that you would like to give your spouse a car for the holidays without your sweetheart's knowledge. "Most dealerships will be experts in DMV [Department of Motor Vehicle] titling," says Phil Reed, senior consumer advice editor at Edmunds.com. "It makes sense that they would be able to do this [from the dealership]. It saves the buyer a trip to the DMV. And from the dealer's perspective, it's a convenience service they offer, making it more likely you will come to that dealership." If your spouse's name is going to be on the title, and Reed recommends it is, the spouse will have to sign financing paperwork at some point. "But that doesn't mean you can't give him the car and have him enjoy the surprise, and then have him sign later, as long as the gifter's credit is sound," he says. "It will be a slam dunk for people with good credit. But if your credit is mid-tier, you might run into problems," he says. What if your salary alone doesn't allow you to purchase a Lexus, but together you could afford the vehicle?
Sometimes a dealership will run the credit for both the gift-giver and the spouse, and they find the credit for the two together enables the purchase. "They usually want both individuals in the couple to sign, but if it's a gift purchase, the recipient can sign after the car has been delivered," he says.Reed recommends talking with the dealership's F&I guy by phone during the later part of a weekday morning. Most finance managers don't get in until around 11 a.m. They are financing cars that have been sold, and it usually takes a couple of hours after the 9 a.m. opening time to sell a car. Clear as many financing hurdles as you can, Reed says, before physically visiting the dealership and selecting the vehicle you want to buy. "It's doable, and would be a terrific surprise. But choose carefully, and remember that it's for your spouse and not for you alone," Reed says. Here's Insure.com's list of the least expensive vehicles to insure.
Insurance for the surprise vehicle
Strategy 1: Add the vehicle to your policyGetting auto insurance for the gift vehicle will be comparatively easy because you're probably already on an insurance policy together, says Loretta Worters, vice president of communications with the Insurance Information Institute. So you should be able to call your agent, swear him to secrecy, and have him add the new vehicle to the policy. "There would be more problems if you're not married. If you're just living together, you might be able to get some temporary insurance through the dealer. But that would be very expensive, even for just a few days."
Strategy 2: Check your policy for automatic coverageExamine your current auto policy and you will likely find it contains a clause stating that if you buy an additional vehicle you have 14 or 30 days, depending on the insurer, to report the purchase to the insurance company.
"So in a sense, you have automatic coverage for 14 or 30 days on a newly acquired vehicle," says Eric Roethe, product research specialist for personal lines with American Family Insurance.Say that your auto insurance policy says you have 14 days of automatic coverage before you must officially add the vehicle to your policy. And say you want to present the vehicle to your spouse on Christmas morning. Buying the car on Dec.15 this year would give you until Dec. 29, likely the first post-Christmas business day, to report the purchase, he says. Here's more about automatic coverage for new cars.
Strategy 3: Bind and delayAnother possibility is to ask your car insurance agent to bind the policy but send the paperwork after the vehicle has been given. "Binding" means that coverage is in place but the policy hasn't been issued yet. Your agent likely has very broad binding authority. "You can call your agent, say, on the 21 st, and say, 'I'm going to buy this new car prior to the holiday, but I don't want any paperwork delivered until after the holidays,'" says Roethe. "Most agents have the authority to bind the coverage on the company's behalf, and they have a period of time before they have to submit the coverage to their company. With most companies, it's probably going to be at least two weeks that they have before they have to report the binding." State Farm spokesperson Missy Dundov also says that insuring a holiday gift vehicle isn't a substantial challenge. "If a spouse would like to do this gift, in most cases our agents can work with the spouse to pull off this surprise," she says. "The 'surprised spouse' does not need to be part of the process. The gift giver can do it all on their own with the agent."
Getting your timing rightDepending on your state, you may need precise timing for titling the car. States have different rules for titling vehicles. For example, in Wisconsin, Roethe says, if you are buying a vehicle without your spouse present, the paperwork may contain a stipulation that the lender will send a letter to the home reporting that the spouse purchased a new vehicle.
Given bank processing times, he adds, if a vehicle is purchased on Dec. 23, the form will not likely appear in the mailbox at home before Christmas. But if the car is purchased on Dec. 15, the letter would likely arrive and ruin the surprise.There's another reason to make the transaction as close to Christmas as possible. "That's because if you buy the new car at the dealer and leave with the dealer-provided actual license plates on the car, if the state [Department of Motor Vehicles] is caught up, they might well have a confirmation of registration mailed to you by Dec. 25. Leave as small a gap as possible between purchase and holiday," Roethe advises. The only question remaining is where to find a giant red car bow to place atop the vehicle. "I've seen them in dealerships with my own eyes, so I know they're not just in advertising," Reed says. "They do exist." More from Insure.com The least expensive vehicles to insure The most expensive vehicles to insure Rankings of car insurance rates by state