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Car Donation: Give The Vehicle For Cash Or Give It Away For Charity?

Car Donation: Give the vehicle for cash or give it away for charity?

If you are wondering what you should do to that old, dirty car outside your house, why not consider donating your vehicle? Car donation has a lot of benefits that range from being environment-friendly, getting tax incentives, and helping charities.

Donate your car in exchange of cash
When you donate your car, one of the big benefits you get is getting an equivalent cash incentive for your old vehicle.

At the end of the year, your donation will also give you some equivalent tax deduction. The fair market value of your vehicle will determine how much you can get in return.

Authorities have tightened regulations on different states due to certain abuses committed by a lot o car donors.

Spiffs in exchange of car donation
There are also car donation groups that give donors spiffs in exchange of your car. Spiffs are gift equivalents for the donated car. Spiffs may come in the form of free hotel stays, free membership to clubs, or price discounts for airline tickets.

They are usually given after your car has been auctioned out. This is a win-win scenario for the donor and the receiving agency since the charity receives more contribution to support their programs while the donor enjoys his or her chunk of reward.

Donating for charity

When you give away your car for charity, remember that you give it away to help a worthy cause. Your old car can contribute to noble causes like educating kids, buidling houses, feeding the hungry, or taking care of the sick. While you will not get some cash in return, you can still get some tax incentives.

Making most of tax deductions when you donate your car

tax-deductionsDonating your old vehicle to charity can spare you a good amount of money when paying your tax. With some planning, you can maximize the benefits of car donation.

Depending on where you are, your tax bureau may have specific rules on deducting your donations to charity from your tax. Most states will look into how the vehicle is used by the receiving charity and how much the car sells for.

How much the car was sold for

Most places will require you to know how much the charity obtained when donated cars are sent to the auction block. Let’s say your old car goes for $4,000 when the charity group put it on sale, then your tax deduction will be limited to this amount.

This will be regardless of the fair market value of the vehicle. If in case the car was sold at a discounted price because it will go to a needy individual, then you can ask for a deduction based on the fair market value.

Know the vehicle’s fair market value

You need to used an acceptable price guide for used cars if you want to calculate the tax deductions using the fair market value of the vehicle. You can use such references as the Kelley Blue Book or you can also do your research over the internet. You need to consider the vehicle’s make, its model, and the overall condition of the ride.

Claiming the tax deduction

Againd depending on where you are, you need to report the tax deduction amount when you file for your tax. You need to be the appropriate form and you have to make sure that your expenses will at least go beyond the amount being deducted in order to qualify.

Tips to avoid scams when donating your car

Donating your car to charity is always a good deed but remember that there are bogus groups that may want to take advantage of you. These organizations pretend to be charitable organizations. They accept your car donation, sell your car, but you will not hear from them again.


You do not want to donate a vehicle to a group that will never put it to good use. You can do a bit of research and avoid such fake charities.

Background check

Before donating your vehicle to charity, you need to do a thorough research about the organization. Call them and ask questions. If they do not want to give any information, then be wary and consider it a red flag.


Another way to verify the authenticity o f a charitable organization is by checking if hey are duly registered. You can do this by calling the tax agency or governing body for these charitable groups and see if they are properly documented. If you are from the United States, you can also check with the Better Business Bureau before handing over your used vehicle.

How they will use the donated vehicle

One important thing you need to check with the charitable group is how they will be using the donated car. If they will sell the car through an auction, ask them to advise you as soon as the car is sold. Be sure that they will provide you with the papers so you can file a tax cut.

Be careful with phone solicitations

Fake charitable groups often rely on different tactics to solicit from people. Carefully check the background of the institution before donating to them. Take your time since you want to make sure that your donation will be put into good use.

Helpful Tips about the Car Donation Process

You might be thinking of donating your old car to charity. If you are not familiar with the process of car donation yet, here are some practical tips to help you understand:

Starting the donation process

Groups which accept car donations will be asking you to provide the model, year, make, and identification number of your vehicle. After sending in this information, you will get a confirmation notice or call from the car donation company and then you will be contacted again to schedule the pick up.

Where will your car go?

A lot of the cars will be sold during auctions to dealers, exporters, and recyclers. The auction is the ideal place to sell the donated vehicles where the returns are high and the process is efficient and compliant to all government and environmental regulations.

License plates and Titles

States like California, Washington, Kentucky, Texas, Minnesota, Oregon, and Oklahoma require that the plate numbers remain on the donated vehicles unless these are personalized plates. You need to contact the department which handles registration of motor vehicles in your area to be guided accordingly. For the states we mentioned above, you must also have the title where you affix your signature notarized before submitting your car for charity.

Different states will also have different rules

With regard to the requirement of the title of the vehicle to donate it to charity. Some states will require titles for newer vehicles while some will not. Some states in the US will also not require titles for donations like boats, ATVs and snow mobiles.

After the donation

You will be receiving a tax receipt after donating your vehicle. You can include the deductions when you file your taxes but you need to itemize the deductions that you can receive. You can deduct the sale price of your vehicle or a certain amount permitted by the state.

A quick guide to car donations

cardonationYou might be thinking of a good use for that old vehicle in the garage. You might have heard of car donation organizations but do not really know much about the program. Basically, a car donation requires you to give away an old vehicle so you can support a cause to help other people like kids in need, cancer patients, victims of abuse, and a lot more.

An old RV, van, truck, or car can go a long way to support charities. Aside form helping other people, you will be able to get some tax deduction for your act of kindness. Here are some basic concepts that you must understand when going thru a car donation:

Tax Deductibility

Most organizations who run a car donation program are tagged by the tax collection agency as a non-profit group so donations made to their group are considered as tax deductible. In case you end up giving your car to a for-profit organization, make sure that you will be getting some tax deduction. If you are not sure, check with your accountant if deductions to your taxes can be made.

Condition and Value of the Vehicle

You are the one who declares the value of your vehicle, and so you are also required to justify the value that you declared. You can visit some websites to determine the approximate value of your vehicle now. Take into consideration damages which will cost the organization when it tries to fix your car.

Know what percentage of the donation goes to charity

Check out different organizations to which you can donate your car. Make sure that the proceeds from the sale of your vehicle really goes to charity and not just to support the costs of the group.

Aside from good fences, car donations also help create good ties between neighbors
As the saying goes, good fences will help you win good neighbors, and so are excellent property values. If you have your good old car in your lawn, it will be best to donate it to charity instead of letting the car be a piece of art at home. Sending the old car to charity does not only clear out some space for new stuff you can put on your lawn, but it also rids your neighbors of an eye sore.

Imagine how your neighbors will appreciate that they no longer have to see the rusty machinery on your lawn, on the street, or on your driveway. Also, in most communities, vehicles left for a long period on the street are often towed or the least issued a ticket for violations. It is not really a good news for anyone especially if you have to take out some money out of your pocket to pay some fines. A car donation can save you some money and even earn you some tax credits.

You can donate a car even if it’s in a very pristine condition or it only has one kick left to take before it falls apart. Your neighbors will surely be glad that they no longer have to worry about the vehicle and you will no longer have to worry about getting fines or stares of disapproval.

The top reason of course why you donate a car is to help people who are in need. Directly or indirectly, your donation can help physically challenged individuals acquire skills so they can get a job or your community to have funds and other resources for emergencies. You can also pick the charity which will benefit your car donation and allow them to make most out of the proceeds.

We’ve joined forces!

Donate Car Source has been your home for car donation information on the web for quite some time, but now there’s a new site out there with excellent info and… we’re backing them up! The Car Donation Site will be a blog-style car donation site with new info on a timely basis helping you with the ins-and-outs of car donating… I’ll be focusing on my faith and my following of Peter Popoff in my spare time.

We’re looking forward to highlighting stuff they’ve written, and helping them double-check their prime information to make sure you’re all going to be well-informed.

Congratulations, guys!

Written acknowledgement by Charity for Car Donation

You have decided on a charity and are quite clear on most of the procedures involved in your vehicle donation. The charity is a qualified one and even your vehicle is qualified for tax deductions.

If the tax deduction you are claiming for your vehicle is more than $500 and hence you require a written acknowledgement from the charity. You must be rest assured that it contains all the relevant information required or you may find it difficult later.

The acknowledgement must contain your name and taxpayer identification number, your vehicle identification number and the date when you made the contribution.

The Charity would also need to mention either that no goods or services were provided by the charity in return for the donation or the value of goods and services provided or that the services provided are intangible like religious benefits. If all these are not included in the acknowledgement in that case you will not be able to claim more than $500.

In case the charity sells the vehicle the written acknowledgement must also contain a statement that certifies the car was sold to an unrelated party, the date the vehicle was sold, the amount received form the sale and that your deductions may not exceed the gross proceeds of the sale.

If the charity does not sell the vehicle then the written acknowledgement would need to contain the intended use of the vehicle, any repairs done to the vehicle or if sold to a needy individual at a less price then that would need to be stated. In all these cases the donor will have the benefit of deducting the fair market value of the vehicle as tax.

To value your car, contact either a specialized dealer or a car insurance company!

Selecting an appropriate charity for car donation
You are an ardent lover of children and you see an orphanage near your home and you desire to do something for them. You observe they do not have a vehicle and your used vehicle in great working condition would be of great help.

So you decide to donate your car. But remember if you are keen on getting a tax benefit on your donation, then you need to check a few facts before donating to your favorite charity. So if you are qualified for a federal income tax deduction and you want to claim deduction for your car donation firstly the charity should be a qualified organization.

The most common types of charitable organizations are educational, charitable or religious organizations. You may need to check if the organization appears in Publication 78, IRS annual list of charitable organization.

You can get it online or even at public libraries. You may also call the IRS Customer account Services division toll free and check the status. One must note that churches, synagogues, mosques temples need not formally register so may not appear in the list but are definitely charities.

Always be sure to have the correct name of the charity and also the charity’s address. You must also consider a charity that is keen to answer your questions and give you the right directions. If they give you vague answers as to where the proceeds of your donation would go then it would be wiser to look for another charity. It is very important to select the right charity, so check thoroughly before you decide.

Do I Need Collision Insurance

Collision insurance covers the necessary repairs to your car if you’re in a crash and comes in handy if the other driver is uninsured or underinsured. Some collision policies include the fee for a rental car, as some repairs can take several days and leave you without transportation. It will also pay to replace or repair your car if the crash is your fault. It’s not standard on most auto insurance, so keep your eyes open for special insurance!

If you lease a car or make payments on a car you are buying, you’ll be required to have collision insurance with the limits dictated by the leasing company or financial institution you’re dealing with. But what if you have finished making the payments for your car and you now own it?

The value of collision insurance depends on the value of your car. If you have a car that’s ten years old (make sure you look into vintage car insurance!), its value is probably so low that you couldn’t buy another car for the amount your insurance would compensate you.

A car that old will probably be “totaled” by your insurance company, meaning it cannot be repaired. You will then be paid the market value of the car. Older vehicles are often not worth the cost of collision insurance. You will have to figure in your deductible, too, or the amount you have to pay before your insurance takes effect.

If you own a newer model car that would be quite expensive to repair or replace, collision insurance might be a good choice and well worth the cost of the premiums. A good agent can advise you whether your car warrants buying collision insurance, together with your usual car insurance or not!

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