Donate A Car

Welcome to our Donate A Car mini website. Here at Donate A Car, we provide the information you need to donate that used vehicle. Here we examine the advantages to donating your used car, we will examine the different types of car donation services, and we will provide a list, with descriptions, of some online organizations that accept vehicle donations. We also provide the most current news about car donations.

Because many people who are donating a car, are also looking to buy a used or new car, we also provide a Book Store consisting of a small but useful selection of books about how to buy a car. Here you will find the most popular publications available for buying a used or new car.

So what are the advantages to donating that old, used, worn out car which you no longer need.

Donate A Car - Advantages

There are some very clear advantages to donating your car to charity. The biggest advantage is that you can use it as a tax deduction when filing taxes. The question arises as to how much you can deduct? This really depends on several factors. Lets examine these factors.

How much you can deduct depends on what the charity sells your car for in an auction. This is the usual deduction for car donation. But there are some organizations that will first try to donate your car to a low income family, they may fix the car, or the car may be used by the organization, and if this is done, then you would get the fair market value of the vehicle which can be used as the donated value.

But it should be made very clear that you will not receive a direct cut in your tax bill. For example, if your car has a fair market value of $500.00, or the car is sold for $500.00 at an auction, this is not the amount you can deduct from your tax bill. Deductions are used to reduce your taxable income, which usually does mean you’ll owe less taxes. We will discuss this aspect of the American tax code in the Tax Deduction section below. So there are two types of values used for vehicle deductions.

• The amount that the vehicle sells for at an auction.
• The fair market value of the vehicle.

To receive fair market value as your deduction, which is the preferable method, the charity must do one of three things to your donated car:

• The charity actually uses the vehicle. For example, a van or car is used to deliver food to the needy, or to the elderly.
• The charity decides to fix the car and the fixes are for major repair work. More then just cosmetic repair such as paint.
• The charity donates or sells the car at a very low price to a needy individual.

Donate A Car - Tax Deduction

Here we provide some more information amount the tax advantages to donating you car. Total amount of deductions on your tax form, in most cases, can not exceed 50% of your adjusted gross income. There are some exceptions which only allow for 20% to 30% of your adjusted gross income. But in most cases, deductions can not exceed 50% of adjusted gross income.

In order to apply deductions for charitable donations, like donating a car, you will need to itemize your deductions. You can not just claim a standard deduction, which is what most Americans do. If your deductions exceed what you get from the standard deduction, then you need to itemize your deductions.

You will not receive a direct cut in your tax bill, but rather the donation is used to reduce your taxable income. Which usually means you pay less tax. Because a deduction’s actual worth depends on your tax bracket, this means a donation of a $300 car would mean a tax cut of only $75 for a filer in the 25-percent tax range. And also remember, this assumes the vehicle has a market value of $300.00, assuming you meet the previously discussed criteria, or the vehicle was sold for $300.00 at an auction.

The point here is that the value you get for your used car is not used to decrease the tax you owe, but rather it is used as a deduction, where the net result is that you will owe less tax.

For details on tax deduction from donating a car, refer to the IRS Publication 526 - Charitable Contributions

So if you rather have more cash from your old clunker, you can try to sell it by fixing it up, place an ad, and respond to inquires. Yes you would make a little more money this way, but is it really worth your time and energy? For some people it is, and some people it is not. Many people would prefer to make less money from the vehicle and donate, and bypass the hassles involved in selling an old clunker. It should be noted that any reputable organization that accepts car donations will take care of all the pick up arrangements, including having a tow truck pick up the car.

Donate A Car - Watch for Scams

There is over 4,000 charitable organizations which would accept your donated car. Make sure the organization qualifies from a tax perspective. There are scams going on where the organization will pick up the vehicle, but the vehicle never goes to a good cause.

Some times cars are donated to charities that do not exist. Recently a California man was convicted after it was learned that he accepted over one million in car donations for a charity called, Foundation for Child Abuse. This charity never existed.

Another example. The National Cancer Association and the National Lung Foundation, in Michigan, was found charging $200.00 for the towing fee. Any organization that wants you to pay for the tow is one you should not donate your car to.

Any organization that tries to charge you for the tow, is in violation of the law. If this is the case, find another charitable organization to donate your car. There are plenty to choose from.

Regulators, at both the federal and state level, realize that they can not oversee all the charitable organizations that accept donated vehicles. Therefore, in this situation, car donation scams will exist. Make sure that the charity you are donating your car to is a registered 501(c)3 organization. For you to use your car as a qualifying tax deduction, the charitable organization must be a 501(c)3, which gives it federal tax exempt status.

You can donate the car directly to the charity, and not an organization or program which handles the donation for you. Many programs which will accept your car as a donation are profit seeking organizations run by car dealerships! These programs which supposedly will donate the car for you take the proceeds from the auction, and sometimes only 10% actually is donated to the charitable organization. Some people do not care if the organization takes some of the proceeds, while other people do care. Just be sure you understand what type of organization you are donating your car to. Check with the IRS if the organization is a non-profit organization listed under paragraph 501(c) 3.

Remember that if the organization is tax exempt under paragraph 501(c) 3, they are by definition a non-profit organization, and therefore are not a profit seeking organizations run by a car dealership.

There are over 4,000 charitable organizations that would accept your car as a donation. The following is a few of the most popular charitable organizations which accept car donations, and they are tax exempt under paragraph 501(c) 3. This list is provided by Car Charity Donation.

Donate A Car - List of Organizations Where you Can Donate Your Car Online

• 800charitycars.org
  Description:
  Established in 1996, Charity Cars, Inc. is a 501(C)(3) nonprofit organization, and the first charity of its kind in the nation. One of their missions is to provide a free vehicle and vehicle support services to assist disadvantaged families.
• Activated Ministries
  Description:
  A nonprofit Christian Ministry classified with the IRS as a 501(c)(3) charitable organization. Activated Ministries is a Christian Ministry working with dedicated missionaries and human service agencies to meet the spiritual and material needs of people from all walks of life.
• Cars 4 Causes
  Description:
  Cars 4 Causes, “The Charity That Gives To Charities”, is a non-profit, IRS Code 501(c)(3) tax-exempt charity.
• TaxDeduction.com
  Description:
  At TaxDeduction.com you fill out one simple form. One or more Charities bid for your business. You can then donate to the charity that offers you the best deal. Car donation is just one of the many items they accept for donation. TaxDeduction.com does not appear to be IRS Code 501(c)(3) tax-exempt.
• Vehicles For Charity
  Description:
  When you donate your vehicle through Vehicles for Charity, 100% of the net funds generated from the sale of vehicle donation will be distributed to legitimate 501(c)(3) nonprofit organizations. Vehicles for Charity, also a 501(c)(3) organization, acts as the agent for all other charities.

If you are a 501(c)(3) organization which accepts vehicles for donation, and you are not on the above list, send me an email with your URL and I will include you on the list. This website, and the above list, will expand over time. Your help in this expansion would be appreciated.

Donate a Car - Summary

There are two main advantages to donating your car to a 501(c)(3) charitable organization. First, you will receive a tax deduction for donating your vehicle. Second, you will have the knowledge that you helped someone in need. Make sure you know the organization you are donating to. If you want to reduce the probability of a car donation scam, or you prefer that a major portion of the profit from the auctioning of your vehicle goes to the charity, make sure the organization you are donating to is a non-profit organization, federal tax exempt under paragraph 501(c)(3) of the American tax code.

For the individual who does not have the time or energy to sell an old, used car, car donation is a viable and easy way to get rid of that unwanted vehicle.