How to Donate Your Car

Humans have a natural desire to want to give. One of the great opportunities in the US is to donate your car – something being used more frequently as it is beneficial for both the donor and the charity. Donating your car is a great deal for you and the charity. You receive a tax write off on the sales value of the car and the charity can fix up the car and sell it – a creative way to increase donations.

Hundreds of thousands of cars are donated to charities each year. In this free tutorial, you will learn how to donate your automobile to a worthy charity. There are a number of organizations out there who promise to make the car donation process easy and simple – but then some of your donation gets intercepted and doesn’t make it to the charity. These 5 steps to donating your car will help your favorite charity get 100% of the donation:

1. Find a Charity You Trust – Which Accepts Donated Cars

Car donation processing companies will help you with the donation process – and take 30-50% of the value of the donation before any money makes it to the charity. There are a number of great charities which will accept your car and be able to use 100% of the profits without requiring a middle man. The middle man often adds little value, so the goal for you as a donor is to find a charity which will accept your donated car and be able to handle the entire process. Many charities have a car donation program – check with the ones you support first.

Even if your favorite charity does not accept donated cars, we recommend finding a charity that does. You don’t need a portion of your donation being eaten up by a car donation agency’s fees – you want all of it to go the charity.

2. Drive Your Car to the Charity Drop Off Point

Many charities will offer to pickup your donated car or truck for free and have it towed, but if it runs, drop it off to them yourself. A charity will pay a third party for the towing service and you want every possible dollar being used for charitable purposes, so if the car runs fine, offer to drop it off yourself at the charity’s drop off point.

3. Make Sure the Charity is a 501(c)(3) Organization

The IRS only recognizes certain organizations for tax deductible donations – a 501(c)(3) non-profit organization. Make sure the charity you are donating to can accept tax deductible donation for you to receive the entire deduction, otherwise, you will be ineligible to write the car off on your taxes.

4. Transfer Your Car to the Charity

When you donate your car to a charity, you want to transfer the title and registration to the charity. If this paperwork is not completed and filed, the car will still be registered in your name and you are still legally responsible for the vehicle. If something happens with that car and its still in your name, you may be held liable even though you donated it.

5. Deduce the Car on Your Taxes Correctly

A donated car is a little different than some other donated assets – the IRS requires the charity to send you a tax receipt for the value garnered at the sale of the car. You cannot use the market value of the vehicle, you need to use the value the car was sold at once the charity processes it. If the car is worth more than $500, you will complete a form 8283 on your taxes to deduct it.

If the charity decides to keep the vehicle and not sell it, makes improvements to the car before selling it, sells it at a discount to a low income person, or if its worth less than $500, you can deduct the fair market value of the car. Be sure to obtain a receipt from the charity as the IRS has increased audits for car donations.

Donating your car to charity can be both fulfilling you personally, but also work out to be a good deal for you and the charity. Following these 5 steps will increase your likelihood for success in donating your automobile.

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