Donate Car to Charity

Donate a car

What is Car Donation?

Car donation is a situation where an unwanted, used or even new car is gifted to a charitable or nonprofit organization by the previous owner. This process is fast becoming the easiest, most popular and effective way of giving in charity. Cars donated in charity gives an organization a wide variety of options.

The charity might decide to use these donated cars for its activities if it is still running. In other cases, they might decide to sell them at an auction or donation center with the proceeds used to fund the activities of the organization.

More often than not, as a donor you get to benefit from donating your car. Should you donate your car to a charity that is registered under IRS (Internal Revenue Service) 501(c)(3) non-profitable organization, you are likely to get tax deduction for the tax year. This is one of the reasons why it is preferable to donate your car to charity than to leave it idle or junk it.

Reasons Why You Should Donate Your Car to Charity

One of the frequent questions on the lips of people is “what good is donating my car?” Well, below are few reasons why you should

1. Easy way of giving back to society:

Donating a car to a charity is probably the easiest and stress-free way of helping the underprivileged in the community. As earlier stated, when cars that are still functioning or resalable are donated to charity, it bolsters their resources.

Majorly, they use it for their activities such as meal delivery to the elderly and the weak and lots of other activities. In the case of non-running cars, the charity has the option selling the parts, repairing or selling as a whole at auctions or donation centers. Hence, one way or another you will be helping lots of people from the comforts of your couch.

2. Worthy tax deduction:

This is probably the most significant and direct benefit of car donation on your part as a car owner. As well as helping the society, some people donate a car to charity for tax deduction. Keeping an unwanted or junk car in your garage causes nuisance and occupies space. Add the fact that you will continue paying tax for the said car and you know it is not worth it.

When you donate a car to a charity that is registered 501(c) (3) non-profitable organization with IRS, your donation will be tax-deductible. Though in most cases the tax deduction you get largely depends on the amount the charity gets from the sales of the car. However, it is still possible to get tax deduction at a value close to the fair market value of your car.

Lastly, keep in mind that you are eligible for tax deduction irrespective of the condition of your car. You just need to follow the due process.

3. Selling your car yourself might be a daunting task:

The hassle of selling your used car might put you off on the long run. In some cases, you might have to run ads on social media or newspapers. There is also the trouble of receiving multiple phone calls and emails just for the negotiation to fail.

Also, you might have to deal with potential buyers knocking on your door just to see the car. All these problems can be solved just a single phone call to the right charity. With charities, you don’t need to get involved in the process of the sales. You just need to sign the appropriate documents and they will do rest.

4. Disposing a car without accurate title:

Inaccurate car titles is sometimes a consequence of mistakes during registration, change of name after marriage or a car being part of a deceased relative’s properties. Most people often get confused on what to do with such a car or simply can go through the process of changing the title.

Luckily, you can donate a car without title. If the charity intends to use the car, they will go through the process of changing the title for you. However, in extreme cases when a title change can’t be done, they might have to sell the parts provided you are the registered owner of the car.

Although, when the car is sold for parts or scrap, it reduces your tax deduction. However, it solves your problem efficiently while also proving beneficial to you.

5. Easy way out with cars that needs expensive repairs:

Sometime the repair of a car might be deemed too expensive. In most cases these cars lose value and you might not get the fair market value when you decide to sell. Instead of letting the car devalue further, donating to charity might be the best option.

Most charities offer free towing for vehicles that are not running. Though, the cost of the towing will be deducted from the value of your car. This in-turn reduces your tax deduction.

6. Frees up space in your garage:

A normal sized car takes up an average 130sq ft of space. It is of no use keeping an unwanted car in your garage. Sometimes most of these cars are no more in the condition to be sold.

However, donating such car to charity is still a possibility as they can squeeze value from it. This is because charity auction cars go for little money. Also, some people buy charity auction cars not for the use of it, but to help the charity raise valuable funds. Hence, you might end up getting a meaningful task deduction from it.

How to donate a car to charity without being defrauded

As easy as it may sound, donating your car might prove hellish if you do not get it right. Amongst the complaints of so many people is the rate they are being defrauded by some unknown charities. Below, we’ve put together the steps you need to follow to know if you are actually donating to a charity or not.

Check up an appropriate charity:

Most charities have a strong online presence these days. Checking on the internet is a nice way to start. One of the reliable sources you can get the efficiency of a charity from is CharityWatch. However, if the charity is located in your community or state, it is good practice to check them up.

Most importantly if the said charity does not have the 501(c)(3) non-profitable organization status with the Internal Revenue Service (IRS), it is definitely not a charity. Any car donation you make to such an organization will not be tax-deductible.

Itemize your car for tax deduction eligibility:

If you intend to donate a car to charity for tax write-off reasons, you must itemize such a car. As a taxpayer, there are two possible values you can get for the tax deduction.

The first is the use of the fair market value of the donated car provided if any of these conditions are satisfied:

If the donated car was sold out to a person in need at a price below its actual value at the time.

If the donated car is being used by the charity to run its cause.

If the donated car was materially enhanced by the charity with the aim of using or selling it.If the current worth of the car is below $500.

If any of the above conditions are not fulfilled, as in a case where a car is sold at auction centers, you will only get deduction for the value or profit made from the sales of the car.

Make sure a receipt issued to you:

It is paramount you get a receipt from the charity. This serves as proof for future reference incase of mismanagement.

There is also another document (1098-c form) which gives the full details of how the car was sold. This should be issued to you within 30 days after the car was sold.

Get IRS form 8283 if needed:

IRS 8283 is only required if the FMV (Fair Market Value) or the sales price of the donated car is above $500. If this is applicable to your car, you must fill the section A of form 8283. This form will be filed with your tax return when the need arises.

In a case where the donated car is valued at above $5000, you have to fill Section B of IRS form 8283. Also, you are required to get an independent appraisal otherwise known as written appraisal for such a car.

Get the car to the charity:

It is advisable you drive the car to the charity yourself if it is still running. This is essential in making sure the charity gets the best value for the car. It also saves you from giving the car to an intermediary trying to make personal profit from your donation.

However, if the car will be towed, most charities have a means of getting it themselves. Though, the cost will be deducted from actual value of the car.

Proper Documentation:

Firstly, you need to approve the signing over of the title to the charity. An agent or representative of the charity should sign too. In a situation where a charity demands you not to fill the assignment of ownership space on the required documents, you should not donate your car to this charity.

As a matter of fact, if you don’t sign over the title of the car, you will be answerable to any criminal offense on the car in the future. This point is crucial because a large of portion of the cars donated to charities are sold for profits. A car that is sold with your information still on the title will remain yours to the law.

A summary of the documents you should have with you after donating your car.

  • Full details of the charity you donated to.
  • A picture of the donated car or an accurate description.
  • In a case where you got an independent appraisal, you should keep a signed copy.
  • A copy of the receipt you got from the charity.
  • A detail of how the car was valued at the time.
  • A copy of every vital document of the car like the title and registration details.
  • A note of acknowledgement from the charity.

Valuable tips on getting accurate tax deductions on a donated car

It is a known fact that tax deduction is one of the most important facets of car donation. Some donors have gotten into trouble with IRS due to inadequate information. Here, we have put together the steps required to get maximum tax deduction possible.

Determine the worth of the car

Determination of a car’s worth is done in two ways. The first is to calculate with the actual price the charity sold the car.

The other facet is the FMV (fair market value). This is only applicable if the charity decides to use the car or it is sold below it actual price to a needy.

Applying for deduction

To claim tax write-off, you need to report the value of tax deduction. This should be done on Schedule A. Note that for your application to go through, the deduction amount you are filing for must not be more than the expenses on Schedule A.

Get IRS form 8283 if needed

If your car is valued or sold above $500 but below $5000, you need to complete Section A of form 8283. But, if the price stated is above $5000, you are required to complete section B of the same form. As well as completing Section B, you need to get an independent appraisal.

Independent appraisal usually depends on what the donated car is used for. However, there are some information that are general to all written acknowledgement. These information are: car owner’s name, car identification number, car owner’s taxpayer identification number and the date contribution was made.

Independent appraisal must also contain any of these statements

  1. A statement that you got nothing in return from the charity for your donation. If you didn’t, Or
  2. A statement that describes and an estimate of what you got in return for your donation. If you got any, or
  3. A statement that what you got from the charity is entirely insignificant. If it is.

Donating a car in some states and the requirements

Donate a car in California

Donating a car in California follows the usual car donation steps with just few exceptions. The exceptions are listed below:

  • You must have a clear title. If you misplaced your title or the title belongs to a deceased family, some charities can help you get a duplicate title.
  • You must get the Release of Liability from DMV (Department of Motor Vehicles). This is to save you from any future liability incurred on the car.
  • You don’t need to remove the license plate when you are donating.

 

There are lots of charities you can donate your car to in California. The best of them of all is the one you know well and support. Other reliable organizations are Goodwill, Kars4Kids, Vehicles for Veterans and Wheels for Wishes.

Donate-a-car-in-New-Jersey

Donate a car in New Jersey

Just like with California you need a title to donate a car in NJ. Though in New Jersey, if a car does not have a title, it can be crushed. In a case where a charity intends to use or sell your car, you will need to provide a clear title.

If you can’t provide the title at the time and you want to donate you intend to donate your car without further delay, you need to have the following

  • Your driver’s license number.
  • A copy of your car’s documents.
  • Lien Release in a case where it was issued.
  • You have to sign two notarized PoA (Power of Attorney).

 

All of these documents should be given to the charity at the point of donation. Also, you can remove the license plate of your car before pick up in NJ. Lastly, you don’t need to fill a Release of Liability form in NJ as the transfer of title covers any future liability from the vehicle.

Goodwill, Kars4Kids, Vehicles for Veterans and Donate Car for charity are some of the best places to donate your car in NJ.

Donate a car in Arizona

Car donation in Arizona is an easy process. The requirements are as follows

  • All cars from 1925 till date must have a title. If you have lost the title but you are the registered owner of the car, you can apply for a duplicate. You can also have the charity do it for you. In the case of dead relatives, you need to provide the death certificate of the owner(s). This coupled with the estate executor’s signature makes it eligible for donation.
  • You must remove the license plate.
  • You must complete the Release of Liability form.

Notable non-profit organizations you can donate your car to in Arizona include the National Public Radio, Public Broadcasting service and Goodwill.

It is important to state that in every other state in the USA, you most probably need to provide a title for donation. You must remove your license plate with the exception of California, Minnesota, Alaska and Hawaii. Finally, you don’t need to fill a Release of liability form except in Minnesota, California, Washington and Illinois.

How can I donate my car for cash?

In some cases, a car is so ridden that even a charity will not be able to accept it. This might be due to their terms, the overall condition of the car or complications with the title.

All hope is not lost as you can donate your car to a junkyard and get cash in return. The junkyard helps in recycling the metal in the car or sometimes sells the parts for scrap.

The process with which you will donate a junk car to a junkyard is similar to that of charity. The similarities are in the need to provide an accurate title for the car, having the documents of the car and if the car is running, preferably dropping it in person.

However, there are differences between donating to junkyard and a charity. The major difference is that instead of the free donation in the case of charity, you get paid for donating to a junkyard. Another notable difference is the need for you to tow a non-running car to a junkyard instead of the free towing with charity.

Finally, since junkyards are majorly non-profit organizations, you are unlikely to get a tax-credit on any car donated to a junkyard.

What is the Best Organization to Donate My Car

There are lots of organizations where you can donate your car throughout the United States of America. Though, for the best value and satisfaction, it is better you donate your car to non-profit organizations.

Here, we have gathered some non-profit organizations that accept and make good use of car donation

National Public Radio (NPR)

For radio program lovers, you can show support for your favorite NPR station and program. NPR lives on donations especially cars and depends on it to fund scintillating programs like car talk on the air and Fresh air.

To donate your car to NPR, you don’t need to get stressed up or wound up. The process is always stress-free and fast. You only need to put a call through to NPR station or visit their website to donate.

Cars donated to NPR station are sold at auction with the proceeds directed to any public station you desire. Note that NPR is a 503(c) (3) non-profit organization; hence, remember to itemize your return to be eligible for tax-credit.

National Public Radio (NPR)

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Goodwill Car Donations

This is a non-profit organization that caters for people suffering from life-limiting disabilities, poverty and unemployment. They have the 501(c) (3) qualification, meaning you will get a tax deduction by donating to them.

With Goodwill, you can donate a non-running car as well as a running one. One of the outstanding characteristics of this organization is that, they sell all donated cars. This is mostly done at a public auction center with the proceeds used for their programs.

To donate a car to Goodwill, you need to have the original title in your name and a note on past repairs and damages on your car if any. Though, Goodwill sometimes accepts cars without titles depending on the complications surrounding it.

Lastly, Goodwill picks up car donations in all 50 states of USA with swift response. To donate a car to Goodwill car donations, you can go to their official website to apply.

Goodwill Car Donations

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KQED Public Media

For radio program lovers, you can show support for your favorite NPR station and program. NPR lives on donations especially cars and depends on it to fund scintillating programs like car talk on the air and Fresh air.

To donate your car to NPR, you don’t need to get stressed up or wound up. The process is always stress-free and fast. You only need to put a call through to NPR station or visit their website to donate.

Cars donated to NPR station are sold at auction with the proceeds directed to any public station you desire. Note that NPR is a 503(c) (3) non-profit organization; hence, remember to itemize your return to be eligible for tax-credit.

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KQED Public Media

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Veterans Organizations

It is public knowledge that the veterans of the United States are selfless minds. They made contributions and sacrifices to keep the country safe. There are several organizations taking care of these heroes and they will gleefully accept your car donation.

Veteran car donations and Disabled Americans Veterans (DAV) are two trusted and reliable organizations where you can donate cars to veterans. These organizations are tax-deductible.

These two organizations sell your donated cars and use the profits to run their activities. They also accept virtually all types of cars in as much as it can be sold for a profit. You can donate your car to veterans by simply visiting the official website of either of these organizations.

Veterans Organizations

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Public Broadcasting Service (PBS)

Amongst the beneficial non-profit organizations is PBS. This organization has been using the power and influence of public media to promote values in the United States.

However, over half PBS’ funding comes from car donation. PBS donate a car program is known for transparency in the way they handle donations. You are sure your donation will be put to good use.

Also, donating to PBS qualifies you for tax-write off provided you itemize your return. Since the majority of the cars donated are sold, your tax deduction will mostly depend on the profit PBS made on the sales.

Like every other well-known non-profit organizations, they pick up cars for free from your location. PBS also offers the assistance needed to help you complete the necessary documents. With this, you are assured an error-free documentation and record.

Public-Broadcasting-Service-(PBS)

Public Broadcasting Service (PBS)

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Habitat for Humanity

If you have been following habitat for humanity, you will know the value in their activities. They are tasked with ensuring everyone irrespective of race or religion has a standard place to live. This initiative has been thriving on donations and especially car donations.

Being a 501(c) (3) non-profit organization, you will get a write-off with this organization if you are eligible. Once you donate your car to this cause, it is sold at a public auction or through direct sales. The profits made are therefore used to fund the good work of the organization.

Habitat for Humanity

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Cars Fighting Cancer

This is another well-structured non-profit organization. They help to battle cancer by providing support for victims. Their activities also include trying to eradicate cancer through sensitization, research and lots more.

Cars fighting cancer can have been able to stand up to this deadly disease with donation. Hence, your car donation will be very appreciated and put to good use.

Luckily, they pick up cars nationwide. This makes it easy for you to donate your car for cancer eradication from just about any location. Cars fighting cancer accepts all types of cars in as much as it can generate a bit of profit to help humanity.

Finally, this organization is 501(c)(3) qualified meaning you will get a tax-credit for your donation if you are eligible.

Cars-Fighting-Cancer

Cars Fighting Cancer

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FAQs on Donate a Car to Charity

Yes, you can. Most charities accept cars without title provided if there are no complications. You just have to be forthcoming and be ready to help with any information such charity needs.

More often than not charities sell the donated cars for profit. Depending on the condition of the car, it might be sold at an auction or sold for part or scrap.

However, some of these cars are repaired and used by the charity for their activities if the repair is not expensive. One other way charities make use of donated cars is giving it to a needy at a very low price.

So it depends on the guiding principles of the charity and the condition of your car.

Well, the jury is out on this. Depending on what matters to you most at the time either of the options are good.

The advantage of donating for charity over selling for profit is the amount you can write-off. This is especially beneficial in the case of old cars, a car that is not running, a car that needs expensive repair and junk cars generally. You get to let go of something you don’t have a use for while also getting the satisfaction and happiness of giving plus the tax deduction.

However, if you need the cash and the car still has good resale value with little or no fault, you can sell. But you need to be ready for the stress that comes with doing so.

Verdict: It is advisable you donate old cars, junk cars, car that is not running as you are unlikely to get the best value for them. But in the case of a car with good resale value, the two options are fine depending on your need.

Absolutely, you can. Charities accept vehicles in all conditions provided it can be sold for a profit. If you are donating a non-running car and you are feeling generous, you can tow the car to the charity yourself.

Although charities offer free towing of cars that are not running. However, the expenses of the towing will be deducted from the car’s value. Consequently, it will affect your tax deduction claim.

Likewise, there are some conditions where charities reject cars. In a case where a major part of the car is missing and the leftover can’t be sold for profit. Another condition is if the car is very old and has no reasonable value such that the towing cost will exceed its value. Aside from the above conditions, charities accept all other cars either running or not.

Basically, when you donate for a good cause, you are more likely not to get paid for doing so. Same applies with donations. Donations are good gestures and easy ways of helping the less privileged in the community.

The only financial advantage you get from donating your car is the tax write-off. But in a case where you feel you need cash in return for your car, you can sell it to junkyards. If it is a running car, you should get individuals that will take it off your garage at reasonable price.

Absolutely not, donations are not limited to cars only. Generally, charities accept other vehicles such as trucks, SUVs, fleet vehicles, vans, golf carts, trailers and motorcycles.

Some charities also accept boats, airplanes, jet skis and campers. You can contact any charity to know the list of vehicles they accept for donations.

Each state in the USA has its own requirements. But the basic requirement every charity will ask for is the title. You can contact the charity beforehand for the requirements of your state.

This question is very important as it saves you from imposters acting as charity. What qualifies an organization as non-profit or charity in USA is the IRS 501(c) (3) non-profit status of the organization.

Before you make any donation to a charity, ask to see this document. If they don’t have the document ready, it is better you look for another charity to donate your car.

Donations made to organizations without the 501(c)(3) status will not be tax-deductible. Also, you are liable to be defrauded as you might be dealing with imposters.