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How Best to Donate Your Car



Donating your car has always been a great way to support charity organizations that also return great benefits such as avoiding the hassle of selling the car and a pretty good tax deduction.

Unfortunately, the burden of making sure your valuable asset is being used correctly and benefiting the people in needs falls on you.

See Also: Donate Your Car for Kids in Needs

You can see what's involved in donating the car the right way so your warmhearted intention is not wasted and benefit the crooks.

Best Online Resource on Car Donation

Check the Organizations Tax Status - Search for Charity by IRS
Another Great Resource - Charity Navigator

Avoid Middleman & Car Donation Organizations

There are many organizations that promote car donation services or even mislead you to believe that they are charity organizations.  More often than not these are either borderline scammers or companies that want to take a cut out of your donated goods.

They typically run TV and the Internet ads all year long and comes back on the top of Internet search when you type in "car donation".  There are some legitimate ones that basically help you with the process and the paperwork, but can take between 50 and 90% of the proceeds from the sale and pass very little on to the charity. 

Giving your car to some of these organizations may make your donation ineligible for tax deduction.  So it best to make the donation to a reputable charity organization directly.

Transfer The Title Carefully

In order to donated the car, you must have the physical title for the vehicle in question.  You can always have one re-issued from the DMV for a marginal fee if you cannot find it. Make sure you sign and date to release ownership of the car, and always fill in the name of the charity on the new owners section.  Never leave the Title blank, and Never leave your license plate on your vehicle.

Doing so can lead to parking tickets and speeding fines being sent to your home under your name, in addition to allowing anyone who gets hold of the title to claim your car.

Get The Receipt with Vehicle Valuation

This is super important if you want to claim tax deduction on your return. If the car is kept by the charity to use rather than sell, or if it is worth less than $500 then you can report its value to the IRS yourself, as a “Fair Market Value” based on listings from Kelley Blue Book or similar sources. 

If the car is worth over $500 then the IRS is going to want to see evidence of just how much the charity sold it for, so you will need a receipt from the charity to show how much you made and you cant claim a tax deduction without this. If the car is worth more than $5000 you must also get an outside appraisal alongside the receipt.  As the IRS rules can change, check the IRS publication linked above.





How Best to Donate Your Car Reviewed by Brandon Oh on 11:05 PM Rating: 5

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