My understanding is similar to @raum,‘s and I have some experience that seems to confirm this. I can’t remember the exact numbers (since it was around 20 years ago), but when my father gave me his old car, the DMV clerk told me it would cost something like $250 if I said it was a gift but something like $20 if I said I had purchased it for $500.
The reason in New York—the state where I was living at the time, which doesn’t have a gift tax—is that the DMV considers cars given as gifts to have been transferred with their full estimated market value intact, whereas cars sold for a specific amount can only be considered to have been transferred for their actual sale price. But in states that do have a gift tax, those taxes are often two or three times the state’s sales tax (and are again levied on the full estimated market value).