Donate Your Car to Charity: Do Good and Get a Tax Break

Whether your car has finally bit the dust or you’re simply upgrading and finally retiring the ol’ beater you’ve been driving since you were 16, donating your car to charity is a viable alternative to simply dumping it or selling it to a random buyer. Sure, you may get a couple hundred bucks for it, but the joy that comes with donating your car to a worthy charity is unbeatable.


But who should you donate your car to? There are countless charities that accept used cars as a donated item, so to ensure your car is going to the right place, you should always do plenty of research. Be sure to investigate their history, their donation policies, and especially their tax policies to ensure that everything you’re doing is on the level. You can find a charity online with a basic Google search, or you can use one of the many online search sites available (such as Charity Navigator or the Better Business Bureau).

If you do donate your car, you should deal directly with the charity and not a middleman. Some companies claim they’ll do all the leg work for you, but this means they’ll also keep some of the car’s value for themselves as a fee. Beyond this, you should also make sure that the charity you’re donating to is an IRS-approved 501(c)(3) organization, which means it’s a non-profit. Religious organizations usually qualify, but be sure to double check this before taking the time to deliver your car to its intended destination.

When donating your vehicle, you should always keep careful records, including receipts and all records of the value of the car. This will be necessary when you claim the donation as a deduction on your taxes. If the car is worth more than $500, then you should get a receipt from the charity detailing how much they profited from it. If it’s worth less or if the car doesn’t intend to sell it, then you can use the Kelley Blue Book value when you report it.

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Posted on June 19, 2012 at 9:00 AM