What is the Best Place to Donate a Car?

Donations
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If you have got a vehicle you are looking to get rid of, you might have heard that donating it to charity is an option. While doing so will make you feel good about yourself and is undoubtedly less of a hassle in most cases than trying to sell the vehicle yourself, there are several things you need to be aware of if you decide to go this route. 

The common things to be aware of are listed below, as well as three great options if you decide donating your car is right for you. 

Option 1: Use DonateACar.com

This is a very easy to use, painless option for a vehicle donation. Rather than having to navigate all of the specifics of paperwork and tax information yourself, this site allows you to pick a charity from a list of hundreds that you would like to support and then offers free next-day pickup for you. They then will sell the vehicle on behalf of the charity, and you might be eligible for a tax refund. This is an excellent option if you are looking to move quickly and do not want to be bothered with extra paperwork and research.

 

Option 2: Donate to Charity Cars 

If you want to know that your car itself is going to good use, this is the place for you. Charity Cars gives needy families cars that have been donated through its program and are in good working order. If your vehicle is up to their standards, you can rest assured that a less fortunate family will be driving it, and if you have got a less attractive vehicle, the company will sell your vehicle and use the proceeds to help power their program. Either way, it is a win-win, and you know you are supporting a good cause: this organization has an incredible near-perfect score on Charity Navigator, an organization that grades charities on how much of the money they raise goes towards those who need it rather than to administrative costs.

 

Option 3: Sell Your Car Yourself And Donate The Proceeds

If you have a junky car that no charity in their right mind would take, then this option is probably not for you. But if you have a moderately worn car and are looking to maximize your tax break, selling the vehicle on your own and donating the proceeds to a charity will probably be a much smarter tax strategy. You can also decide from a broader array of charities to donate to than if you were simply picking one that accepted car donations. 

Keep Proper Documentation

You absolutely need to have a clear record of the donation when tax time comes around. The IRS guide to vehicle donation notes what you’ll need, but the key is to make sure you work with a legitimate charity that knows these rules and will be willing to help you meet them. 

If You Want a Tax Break, You Will Have to Itemize

Unfortunately, the only way to get a tax deduction for donating your car is if you itemize your deductions, and you will only be saving in taxes if your deduction is more than the standard deduction amount. If you have given a lot of money to charity (in excess of the standard deduction), then it makes sense to itemize -- otherwise, you’ll save more by just sticking with the simple deduction. 

Give to a Qualified Charity

If you want to take that itemized tax break, you will also have to make sure that the organization you donated your vehicle to is recognized by the federal government as a 501(c)(3) or a religious institution. If you’re not sure, you can check the IRS website

You Typically Can’t Write Off the Fair Market Value

In the vast majority of cases, you won’t be able to donate your car to a charity and simply write off the amount of money that a private seller might give you for the vehicle. You will need to meet very specific conditions to do so, and if the charity auctions your car, you will only be able to write off the amount they auction it for. If the value exceeds $500, you will also need to file a Form 8283.