How to Donate Your Car

By eHow Personal Finance Editor

Give it away now

Rate: (12 Ratings)

Donating to charity is a relatively painless way to get rid of a car when you don't have the time to sell it or don't think you can get what it's worth. While not every car is acceptable, donating a car to a charity lets you deduct its fair market value from your taxable income.

Flag Article

Instructions

Difficulty: Easy

Things You’ll Need:

Kelley Blue Book
Kelley Blue Book
Tax receipt

Step1

Find a charity that accepts cars without charging a large removal fee. Make sure the organization is a registered 501(c)(3) charity or qualified religious organization that can lawfully accept your donation and from which you can lawfully claim a deduction.

Step2

Determine the fair market value of your car. According to the IRS, you are responsible for determining this; use the Kelley Blue Book or IRS Publications 526 ("Charitable Deductions") and 561 ("Determining the Value of Donated Property"). If it's worth $5,000 or more, have the car appraised by a certified professional.

Step3

Get a tax receipt with the charity's name and federal tax ID number, donor's name, date of donation, as well as the year, make and model of the donated car.

Step4

Notify the DMV and your insurance company that you no longer own or insure the vehicle. Follow state regulations on what to do with the title and plates. Keep your receipt and completed IRS Form 8283 for tax time.

Tips & Warnings

Religious organizations aren't required to apply for an IRS tax exemption in order to be qualified.
The tax break or refund could be the same amount as if you'd sold the car, but without the bother. IRS Publication 78 (at irs.gov) can verify if an organization is qualified to receive deductible contributions.

Comments

oscar55 said

Flag This Comment

on 11/2/2008 A good overview. For some more background information on donating your car and finding an appropriate charity, check out http://www.giveusedcars.com

cmaurice said

Flag This Comment

on 8/4/2008 I did a lot of research before I donate our car. We finally decided on Good News Garage. They tow for free, you can donate online, so that was handy, they have been doing this for twelve years and their goal is to provide vehicles to working low-income families.

They were a little slow on giving us our tax letter, it took about 2 months but other than that they were very easy to deal with.

We received a thank you card from the single mom who received our car, via Good News Garage's staff, I felt like our car went to a good new home.

donateacar said

Flag This Comment

on 4/17/2008 Donated cars also sell at auction houses all over the country. If the vehicle that is donated doesn't meet the requirements to have the charity use the vehicle but isn't completely scrap, that car could get sent to an auction and whatever the auction is able to sell the car for is what you would claim as a deduction. So, there is a middle ground between KBB value deduction and a flat rate scrap deduction. We at http://www.donateacar2charity.com have had quite a few of our donated cars sell for the up to the KBB price allowing the donor to claim that amount without us retaining the car for our use.

outreachcenter said

Flag This Comment

on 3/19/2008 http://www.outreachcenter.com

dlt3354 said

Flag This Comment

on 11/28/2007 The laws have changed. Now in order to receive the full Kelly Blue Book value for your car, the charity must agree to use the car for its charitable purposes and NOT to sell it for scrap. If the charity sells the car after you donate it to them, you are only allowed to claim a tax deduction for the amount the charity received for the car, which can be very little if it was sold for scrap. You need a letter from the charity stating that the car will be used for its chairtable purposes or given to one of its clients for their use in order to claim your full deduction.