This guide on car donations was written to help explain some of the step involved in making a car donations. This is written from my research and experience with donating cars to charity. Although I try to make this list as inclusive as possible it is not complete and you should still due your own homework before making a car donation.
History of Car Donations
Helping out a charity with the donations of a car, truck, van, RV, boat or motorcycle has become a popular way to help out charities. There are several advantages to making a car donations such as knowing you are helping those in need. Plus you don’t have to sell the car yourself and often car donations are tax deductible.
Depending on the vehicle you are planning to donate it will be processed in a couple different ways. If the car is in good running order it will likely be fixed up and resold. However if your car donation is not running then it will likely be sold for parts and the rest will be recycled. The money is then given to a charity. However there is a lot more to it then that.
Here are many of the key car donation steps you will need to be familiar with.
Tax deductibility- most car donation charities are classified by the IRS as non-profit charitable organizations, and car donations made are tax deductible to the full extent of the law. If you end up donating your car to a for-profit dealer or fund-raiser, make sure that your deduction would be considered tax deductible. In addition, individual tax situations vary, so always check with a tax professional or other advisor to confirm if you would receive a tax deduction in your specific case.
Value- the value of the vehicle for tax deduction purposes is made by you, the donor. Beginning in 2005, the rules for declaring value changed, and the donor is required to justify the stated value. There are several online resources where you can get estimates of the car’s value for this purpose.Each car donation charity will give you a receipt for the donation, and then you will have to declare the fair market value on your tax returns.
Title- to donate your car, you generally need clear title, but other arrangements can sometimes be made if you do not have the title paperwork.
Condition of car- most car donation charities will take your car regardless of condition (even it doesn’t run) unless the anticipated proceeds from the sale would not cover the cost of towing the vehicle.
Pickup area- if you live anywhere within the US, you will be able to find at least one car donation charity that will accept your donation (you just might have to do a little bit more searching if you live in a remote area).
Percentage donation- a good measure of any charitable organization is the percentage of donated funds that support the actual charitable work and are NOT used to support the overhead of the charitable organization. Finding this percentage for all the car donation charities requires a significant amount of research, as this figure is not listed on most car donation web sites.
In conclusion, we hope you have found the information we have put together for you useful. We recognize that this guide was in no way exhaustive, and that there is much more to donating a car than what is included here. We suggest that you use the information in this guide as a starting point in your search for the right car donation charity for you.
