How to Donate a Vehicle to a Private Party
Donating a vehicle can be a rewarding task, even if the reward is simply getting an old clunker out of your front yard. While donating a vehicle to a 501(c)(3) charity can be a beneficial tax credit, donating a vehicle to a private party may supply a needy family with a much needed mode of transportation, give a father and son a project over which to bond, or simply brighten someone's day.
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Instructions
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Selecting a Recipient
When you have a vehicle to donate, a simple advertisement on a service like Craigslist.org or in a local newspaper may bring a flood of inquiries. Because many of the inquiries will simply be from individuals hoping to turn a free gift into a quick profit, sound judgment and a fair amount of caution must be used to differentiate between the truly needy and the truly greedy. Be sure to ask prodding question such as, "what will you do with the car?" or "how will this car benefit you?" Of course, if you simply want to have the car removed, this level of inquiry may not be necessary. -
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Delivering the Car
When a recipient has been identified, receipt of the vehicle must be arranged. If the car runs, this arrangement may be as simple as allowing the new recipient to drive the car away. If the car doesn't run, however, the recipient will likely need to arrange transportation or use a towing service. Regardless of the car's operational status, arranging transportation for the vehicle is traditionally the responsibility of the recipient. -
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Sign the Title
To release legal ownership of the vehicle, you will need to sign the vehicle's title. In many states, a sale amount is required when transferring ownership of a vehicle; donated vehicles may contain a zero (0) in this field, but it may be helpful to attach a signed written explanation of why no payment was accepted. The department of motor vehicles in some states may still require the recipient to pay taxes on the vehicle's fair market value, though many states recognize (and do not tax) no-cost donations if the title is accompanied by an explanation of the donation. If the recipient is simply going to sell parts off of the vehicle, a bill of sale may be sufficient in lieu of a title.
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Tips & Warnings
Donations to private parties are not generally tax deductable; if you are looking for a tax credit, consider donating your vehicle to a recognized 501(c)(3) organization.
