Do you have an old car that you want to get rid of but you also don’t want to go through all the hassles of selling your car?
Keeping an old car that you no longer use takes up a lot of space in your garage. If you keep your car there without any maintenance, then eventually rusting will occur that will damage your cars resale value.
And salvaging a rusted and damaged car is a lot of trouble as well as selling your car. So, what should you do?
In this case, donating your car to charity might be the right thing to do.
Donating your car to charity is very easy as most of the charities will be happy to pick your car from your home completely free. This way, you can not only help these organizations to make this world a better place, but you’ll also get tax benefits.
But donating a car to charity can also involve a lot of research. Finding the right charity that shares your values and handing over the car to them will be a lot of work if you don’t know how to do it right.
Don’t worry. We’ve got your back.
In this post, we’ll show you everything you need to know to donate your car to a charity with a breeze.
But before we start, let’s see some reasons why you should donate your car to charity.
So, here we go…
Why Should You Donate Your Car?
If you or anyone in your family has never donated a car to the charities, then it may seem odd, even strange to go for it.
But it is a kind of charity that has been going on for so many decades. Like any other charity, you can contribute to the betterment of your community while getting tax benefits from it.
So, if you have a car that is still in working condition and you want to get rid of that, then you may donate it to the charities.
Let’s see some reason why you should donate your car:
- To Help the Charity You believe In: By donating your car to charity, you’ll not only help the charity to support your community, but your car can also be a boon to their efforts.
For example, if you’ve donated a usable car, then the charity can use it as their vehicle to distribute meals, taking patients to the hospital, and reach people faster.
You can also donate your car to your local college. This can help in their educational programs in many different ways. They can use it for teaching mechanics.
- You’ll Get Tax Benefits: Although getting tax benefits by donating your car may not seem a great deal after 2004, you can still get a healthy value for your donation.
It normally depends on your car’s fair market value and the charity’s auction value to determine the amount of tax-deduction you’ll receive. For example, if your car’s fair market value is $4000 but the charity sells it for $2500, then you’ll get $2500 in tax benefits.
If the FMV of your car is more than $500, then make sure to collect and file IRS Form 8283 to get the best benefits.
Just make sure you have the proper documentation of your donation. This way, you can easily get your desired tax deduction.
- To Avoid the Headache of Selling Your Car: Let’s face it. Selling your car yourself is a lot of hard work. You have to place Ads, reply to all the emails and hours-long phone calls. And if that was not enough, you may also have to show and chat about your car to your potential customer. Maybe even a test drive.
You easily avoid all these headaches by giving your car way to a charity. Also, many charities will pick your car up from your home totally free of charge.
So, if you want don’t want all the hassles related to selling your car, then donating your car is the best option for you to opt-in.
How to Donate a Car to Charity
So far, you’ve covered how donating your car can benefit you and your community. There is definitely no other feeling that can be equal to the happiness of giving something to make this world a better place.
But before you look for the best charities to donate your car, you have to understand how to do it. To make sure your donation is properly utilized, let’s see how you can donate your car the right way.
Here we go:
- Make Sure the Charity Accepts the Car Directly: Always make sure that you select a charity that directly accept your car without any middleman.
When you donate your car through a middleman, they usually take away a big chunk of the profits the charity gets from your car. On the other hand, if you select a charity that directly handles the process of donation and the transaction, then all the profit remains with your charity.
This ensures that all the money from your car is going to support your community and make this world a better place.
- Make Sure Your Chosen Charity Is a 501©(3) organization: To make sure you get the tax benefits from your car donation, always make sure that your preferred non-profit organization has a public 501©(3)
- Correctly Transfer the Ownership of the Car: If your charity asks you to leave the assignment of ownership space blank so they don’t have to retitle the car, then you better be looking for other charities.
If you don’t transfer the ownership of your car to your charity, then you’ll be ultimately responsible for all the activities that will be done using your car. At least that what the law states.
So, if you don’t want to get involved in any potential trouble, make sure you transfer the ownership of your car while donating it.
- Always Use FMV: Always use the FMV or Fair Market Value when you’re looking to donate your car to charity.
It’s necessary especially if the charity you’re going to donate your car is thinking about using your car for their need or if they’re planning to sell the car at a cheaper rate to any person with low income.
Also, if your car’s value is less than $500, then make sure you use the FMV of your car while donating it.
This will make sure that you get the correct tax benefit for your car.
- Do the Necessary Paperwork: Any donation other than the cash ones may cause a potential IRS audit. That’s why it’s crucial to get your paperwork ready.
Make sure to obtain an acknowledgment from the charity if the FMV of your car is well over $250. Also, if the FMV of your donated car is greater than $500, then obtain the IRS Form 8283 and fill up Section A. Make sure to attach it with your yearly taxes.
Best Charities to Donate Your Car
Now as you know the process of donating your car to the charity in the right way, you might think about looking for charities to donate your car.
But searching for reputable charities who’ll use most of their revenue in charitable works is hard. That’s why we’ve compiled a list of 5 best charities you can donate your car to.
So, let’s get started…
1-800-Charity Cars is one of the first charities that started accepting car donations. Started in 1996, this charity provides a “Gift of Transportation” to the families that cannot afford a car for their daily transportation.
This charity uses almost 100% of your donated car for the charitable causes as it doesn’t work with any middleman.
It has helped victims of domestic violence, veterans, low-income working-class families, people with disability, and people who suffered from a natural disaster to get their own car.
According to their claim, so far they have changed the lives of more than 20000 families.
You can easily donate your car here by filling an online form or by calling them. It’ll usually pick your car up within the next 24 hours.
If you’re more interested in supporting the youth and their education, then Kars4Kids is the right charity for you to donate.
Like the most reputable charities, they also don’t use any middleman to ensure 100% of your car donation directly reach Kars4Kids. With more than 500000+ donors, this is one of the biggest charities to accept cars.
All you have to do is to fill up an online form and you can have your car picked up within 1 day. You’ll receive a tax receipt for your donation to help you comply with IRS so you can enjoy tax benefits of your donation.
If you believe that helping the homeless to get their own shelter is one of the biggest responsibility of the humankind, then you should select this charity to donate your automobile.
Habitat for Humanity builds new houses for the families that need a new place to live. This is a great way to help families all around the country, especially those who lost their shelter due to a natural disaster.
You can easily donate your car to it by calling them or filling an online form. You can schedule your pickup time and may also qualify for a tax deduction.
4. Car Angel
This is a relatively versatile organization to donate your car. One thing that makes this charity special is that you can choose which cause you’re going to support while donating your car.
Whether you want to support health improvement, national education, or general welfare, you can do that by donating your car to Car Angel.
You can easily donate your car without the hassle of title transfer and will get an FMV tax receipt when you donate your car here.
Whether you have a car in a good working condition or not at all, you can always donate it to Goodwill to help your community.
It’ll just take as little as 2 minutes to fill up its online form and then you can schedule a pick-up time for your car. You’ll get a tax receipt within some days of donating your car so you can have tax benefits.
By donating in this charity, you can help a lot of needy people to get essential job training, education, and skills so they can secure a job. This way, you can help them live a better and more fulfilling life.
Car Donation Scam
So far, you’ve covered the car donation process and the best charities to donate your car to. But you might want to support your local charity that shares your goals and values.
That’s great. But are you sure that they’re a legitimate non-profit organization and not another scam that will rob you of your car pushing you to a lot of trouble?
As you receive a tax benefit for any donation you make, IRS and the government take this thing very seriously.
If you fall for one of those scams then you’ll have to face a lot of problems. You may have to face weeks, even months of financial questions. You may have to fill up paperwork to clear things up with your state and the federal government. Or worse, the IRS may start to evaluate all your previous tax returns.
And it’s can never be good news.
How to Save Yourself from a Car Donation Scam
Car donation scam is going to set you up for a lot of trouble. You’ll not only lose your car, but you will also have to face the IRS and a possible inquiry.
So, if you don’t want that letter from IRS with a red stamp which almost always means trouble, you better steer away from all the scam organizations.
Here are some tips to avoid car donation scams and donate your car at the right place…
- Do Proper Research: The number of charities has grown almost 1.5x to approximately 965,000 in just 13 years, according to USA Today. That’s why it has become increasingly hard for federal and the state agencies to keep a track of every single one of them.
To stay out of any potential fraud, take a look at the IRS Publication 78 and check if your charity has a 501©(3) status. If it has, then you can be sure that it is legitimate. Also, inquire your state attorney’s general office for more information.
A little amount of research can save you from a lot of hassle.
- Avoid Middlemen and Donate Directly to the Charity: Always try to avoid middlemen and donate directly to the charity to make sure the charity gets 100% of the revenue generated from the car.
Even if a charity work with middlemen, do proper research of them. Handing your car over to the wrong person will cost you big time.
That’s why you should always work with the charity directly. If any charity pushes you to donate via a middleman with no obvious reason, then run far away from them.
- Never Hesitate to Ask Question: If you have any questions about the charity, then ask questions; preferably a lot of them.
Ask questions to understand how their charity works and how they’re planning to use your car to serve the community. Ask for their website, brochure, and other information to verify their legitimacy.
It’s always better to ask these questions before making a donation to avoid being questioned by the IRS.
In the End…
Making a donation is a great way to support your community. And donating a car comes with a lot of perks.
Not only you’ll be able to support the charity that shares your values, but you’ll also receive a tax benefit for your donation.
Understand the process of donating your car to go through the process of donation smoothly. You can use our list of charities to donate your car or you can look out for your own.
If you’re looking to donate any other charity, then make sure you do proper research about them to stay away from any kind of scam. Try to donate the car directly to the charity instead of donating to a middle.
This will ensure you get the best experience of donating a car to charity.
PS: Are you planning to donate your car to charity?