how to donate a car

Want to feel less guilty about your new convertible car purchase? Car donations are becoming increasingly popular around the world but why when many people are in financial difficulty do people want to donate a car to charity? There are two main reasons:

  1. You no longer need an old car and in these difficult times want to do something to help others. Donating your car to charity is straight forward and could save you the time and expense of selling it.
  2. You may receive a tax credit for the value of your donation. In many countries, as with other charity donations, you will be able to claim a tax deduction or credit up to the value of your vehicle. The charity will often collect the car from your home and you avoid the costs of advertising the car for sale.

Laws are different depending on your state or country but as a general rule in the US if your car is valued below $500 you will receive a deduction of the fair market value of your vehicle. Over a $500 valuation and you will need to wait until the charity have sold on the car.

Things to remember when donating a car

Sounds great doesn’t it? Be careful though, there can be pitfalls. Some charities may not accept some convertible cars, particularly those in poor condition as they can be difficult to sell.

First contact your local tax office to check up on the legal details for your area. You may need a valuation or sales details from the charity to complete your tax deduction.

Ensure the charity is worthy and a properly registered organisation that doesn’t operate with high overheads. Feel free to ask what percentage of their turnover are overheads – if it is over 25% you might want to find a more efficient organisation. Avoid handing your car over to middlemen. These can be businesses who are charging a fee to the charity for collecting cars. They may even keep some of the cars for themselves and at best some of the money the charity could have kept will be going into their pockets. Delivering the car yourself will ensure that the car ends up in the right hands and their overheads are minimised.

Transfer the vehicle directly to the charity by filling in the owner’s document. Don’t agree to leave the new ownership details blank. This will ensure the car becomes the official property of the charity (and not anyone else) and that you are not liable for speeding or parking fines after you have handed over the keys.

Make sure you get a clear receipt of your donation and if need be arrange to collect further sales details at a later date. Keeping all the paperwork correct may seem a pain but this will ensure that your claim is problem free.