When buying a new car, most people choose to sell their old one. However, you also have the choice to donate your old vehicle to a good cause. You might be able to claim a tax deduction for the vehicle donation depending on a few things.
However, if you donate your car, you won’t receive any cash from the sale of your old car. The decision should ultimately depend on your needs and your ability to find the ideal charity for you.
In this article, we are going to cover a complete guide to car donation charities like what are some of the best car donation charities out there, tips for donating your car, tax benefits etc. So, without wasting much time, let’s get started.
The benefits of donating a car to a charity
The sense of fulfilment you get from helping others and supporting a good cause is the biggest advantage of donating a car, as well as the most compelling reason to do so. Giving could be the best course of action if you want to carry out a good deed when it comes time to replace your car.
Other advantages exist as well. You don’t have to deal with the hassle of looking for a buyer and setting up test drives because most charities are happy to accept almost any vehicle. Similarly to this, if your car is in bad shape, it might be difficult to sell. If so, giving rather than selling might be a simpler and faster choice.
Volunteers of America work tirelessly from coast to coast to give the less fortunate hope. The most vulnerable members of our community have received assistance from Volunteers of America for more than 120 years.
Types of car donation charities
After deciding to donate your car, which charity should you pick? There are many deserving charities from which to choose. A good rule of thumb is to get in touch with a charity that you personally support and inquire whether they accept donations of cars. By doing this, you can be sure that your donation will reach the charity of your choice. You are aware that the value of your car goes towards a cause you support, even if they sell it for a profit.
- National Charities
- Local Charities
- Faith-Based Charities
- International Charities
Reputable Car Donation Charities
Habitat for Humanity
Automobiles, trucks, motorcycles, boats, snowmobiles, recreational vehicles, farm machinery, and construction equipment can all be donated to Habitat for Humanity. To raise money for the charity’s goal of providing families in need with safe and affordable housing, vehicles are sold or recycled.
On a scale from A+ to F, CharityWatch assigns Habitat for Humanity International a grade of B for its financial management. According to CharityWatch, the organisation spends an average of $27 to raise $100 in donations, allocating 73% of its budget—relative to overhead—to programmes.
In 2020, the nonprofit research organisation Guidestar gave Habitat its Gold Seal of Transparency.
Official Website:
Ronald McDonald House Charities
Donations of automobiles, including cars, trucks, boats, RVs, and other vehicles, may be accepted by the local chapter of Ronald McDonald House Charities (RMHC). When a seriously ill or injured child is hospitalised, the organisation sells the cars and donates the proceeds to help families have a home away from home.
You can Call 855-227-7435 or go to the organization’s car donation website if you’d like to donate a car to RMHC. Your car will be picked up at no cost by Charitable Adult Rides & Services (CARS), a nonprofit that collaborates with RMHC for vehicle donations, and you’ll receive the paperwork required to write off the donation as a charitable contribution on your taxes.
Official Website:
Goodwill
The charity does accept donations of cars, RVs, boats, motorcycles and many other speciality vehicles. You cannot drop off a car at a Goodwill donation centre. All donated cars are sold by Goodwill, and the proceeds are used to fund its services and vocational programmes.
According to CharityWatch, which awarded Goodwill Industries International an A rating, the organisation spends just $2 to raise $100 in donations and spends just 87% of its budget on programmes as opposed to overhead.
If you want to donate your car, call 855-980-0171 or complete the Goodwill vehicle donation form to get started. The company will arrange to pick up your car and will also send you a receipt.
Official Website:
The Salvation Army
In some places, the Salvation Army accepts vehicle donations. The charity sells donated cars to raise money for a range of initiatives, such as disaster relief, homeless shelters, food banks, veteran services, job training and more.
The Salvation Army is divided into four regions: the Central, Eastern, Southern, and Western regions. All have a CharityWatch rating of B+ or higher.
Official website:
Canine Companions for Independence
According to CharityWatch, Canine Companions receives a B grade because 68% of its budget is allocated to programmes and $20 is spent on fundraising for every $100 in donations. Vehicles of all kinds, whether they are in working or non-working condition, can be donated to the organisation. Call 866-398-4483 to begin your donation, or start it online.
Official Website:
Charity Motors
Used cars can be donated to Charity Motors, which then sells them and donates the money to a good cause. Additionally, the group assists people with low incomes in buying cars. Trucks, motor homes, boats, motorcycles, and both working and non-working cars can all be donated to Charity Motors.
The organisation, which has offices in Detroit, Dallas, and Atlanta, accepts donations nationwide and offers free towing services. When donating a car through Charity Motors, donors not only get a significant tax deduction, but they also get to pick the nonprofit that will get the sale proceeds.
Official Website:
Cars for Kids
Since 1992, Cars for Kids has been a 501 (c) (3) Non-Profit Organisation changing lives and assisting children in graduating. All vehicle and car donations give children the resources they need to succeed, enabling them to create a better future for themselves.
Their car donation programme is available in all 50 states, and our helpful and knowledgeable donation specialists are on call around-the-clock. They provide free towing and accept almost any type of vehicle, whether it is running or not, including cars, trucks, vans, boats, motorcycles, RVs, campers, jet skis, forklifts, trailers, and RVs.
Official Website:
Feed The Children
By giving your car to Feed The Children, you can ensure that no child goes to bed hungry ever again. Children and their families will be able to live more stable lives and experience less worry about when their next meal will arrive thanks to your car donation.
In the past 40 years, Feed The Children has emerged as one of the top private charities fighting to eradicate world hunger. By giving them food and other necessities, Feed The Children helped an estimated 6.5 million people last year.
Donate your car to Feed The Children online or by calling (888) 966-1425 to support the ongoing efforts!
Official Website:
Boy Scouts of America
The Boy Scouts of America is also a 501(c)(3) nonprofit that welcomes donations of all kinds, including motor vehicles. Your vehicle can be donated to their cause through their official vehicle donation programme, whether it is running or not. You can easily donate your car to the Boy Scouts by calling a toll-free number or completing an online donation form.
Your vehicle will be taken to the auction or the salvage yard by a tow truck as soon as the required paperwork is filled out and it arrives.
One Car One Difference, which is overseen by the Insurance Auto Auctions Donation Division, manages vehicle donations for the Boy Scouts.
Official Website:
Car donation Wizard
It collaborates with some of the most reputable nonprofit and charitable organisations across the country. They put a lot of effort into making sure that the most money possible from your vehicle donation is raised, ensuring that your donation has the greatest possible impact on your charity.
Keep in mind that your car donation might qualify for a charitable tax deduction as an added bonus for you!
they accept the majority of cars, trucks, RVs, motorhomes, boats, motorcycles, off-road vehicles, and more!
Official Website:
How to donate a Car to a Charity?
Locate a charity that accepts car donations directly.
Avoid using the for-profit intermediary companies that are advertised as handling car donations as much as you can. You can make sure that all of the proceeds go to the charity by choosing one that manages the transaction itself. It’s possible that the nonprofits you already support have a programme for car donations that you are unaware of. Consult them initially. If not, do some research and find a well-performing nonprofit organisation that carries out the type of work you value in the area you want to focus on.
Check to See if Your Organisation Is a 501(c)(3)
Donations to 501(c)(4) organisations are typically not tax-deductible even though many organisations can claim non-profit status. These are political groups with authorization to influence our government. Verify the 501(c)(3) public charity status of the person you intend to give to.
Use the car’s fair market value (FMV).
However, you must use the FMV and not just the highest value listed for the year and make of your car. There are a few exceptions that allow you to use the Kelley Blue Book or a NADA guide. Use the FMV if your car is sold at a discount to a person with low income, the charity keeps and uses the car rather than selling it, the charity makes improvements to the car before selling it, or if the car is worth less than $500.
Otherwise, you may only deduct the amount listed on the written receipt the charity sends you as the price the charity receives when the car is sold at auction.
Finish all of your paperwork
Maintaining thorough records of car donations is crucial because they are the most frequent causes of IRS audits. In particular, you must obtain and keep a written acknowledgement from the charity if your car is worth more than $250. Additionally, if the value of your car exceeds $500, you must fill out section A of IRS Form 8283 and include it with your annual taxes. Additionally, if the value of your car exceeds $5,000, you must obtain an independent appraisal and complete Section B of IRS Form 8283.
Obtain a tax receipt!
Call the charity and ask them to email or mail you a tax receipt if you don’t get one within three to five days of the car being picked up! Reputable car donation charities ought to be able to quickly give you this receipt.
Tips for donating your car
Donating your car to charity is a great way to give back to your community and make a positive impact on the world. However, with so many charities to choose from, it can be challenging to determine which one is the best fit for your donation. To ensure that your car donation goes to a reputable charity and has the greatest impact, it’s important to do your research and consider a few key factors. These car donation tips below will com in handy if you are planning to donate your car.
Conduct Research on the Charity
Before you donate your car, it’s important to do your research on the charity you plan to give it to. This includes finding out the legal name of the organization and not just relying on third-party or Google information. Additionally, you should check who the recipient of the gift is and who benefits from your car donation. By conducting research, you can ensure that your donation goes to a reputable charity and that it will have the most impact.
Verify Charity’s Location and Registration
Another important consideration is the location and registration of the charity. You should check if the charity and the fundraiser are registered with your state’s charity regulator. In some states, charities must register with the state regulatory body. By verifying the charity’s location and registration, you can avoid scams and ensure that your donation goes to a legitimate organization.
Check if Your Donation is Tax Deductible
If you plan to claim a tax deduction for your car donation, you should make sure that the charity is eligible to receive tax-deductible contributions. To be certain, search for the charity in the Tax Exempt Organization Search of the IRS. Keep in mind that PAC and individual donations are not tax-deductible.
Obtain Documentation for Tax Purposes
If you do plan to claim a tax deduction for your car donation, you will need to obtain documentation for tax purposes. This includes a written acknowledgement of receipt of your gift, which should be sent to you within 30 days of the sale of your car. The invoice should include the vehicle’s gross selling price, the year, make, model, and VIN. It should also state that your donation was not in exchange for any goods or services.
Avoid Companies that Process Charitable Donations on the Side
When donating your car to charity, it’s important to avoid companies that process charitable donations on the side. Instead, look for a local charity that manages the transaction itself. This will ensure that all proceeds go to the charity and not to a third-party company. It will also make it easier to hold the charity accountable if something goes wrong or if you have a negative experience.
Beware of Imitation Charities
Finally, it’s important to be on the lookout for imitation charities. Some charities have names that sound similar to well-known brands, and some exist to trick donors into believing they are supporting someone else. To avoid scams, do your research and make sure that the charity you donate to is legitimate and has a proven track record of helping those in need.
By following these tips, you can ensure that your car donation goes to a reputable charity and that it will have the most impact.
Frequently asked questions about car donation charities
Can I donate a car that doesn’t run?
Yes, If your car isn’t running right now but you still want to donate it, some charities will still take it.
What happens to the donated cars?
The vehicles are sold entirely or in part.
How much tax deduction Can I get?
You may deduct $500 or your car’s fair market value, whichever is less if the charity sells your car for $500 or less. For instance, if your car is worth $650 but only brings in $350, you can write off $500.
Are all car donation charities legitimate?
No. Not all charities are created equal. Some are more transparent while others just work for their own benefit.
Can I donate my car for cash?
Yes
Should I donate my car or junk it?
Obviously, it makes more sense to donate if you want to make a charitable contribution. However, you can get paid for the car if you junk it. Junkyards are pleased to make a bid on your vehicle.
Do I need to notify DMV if I donate my car?
You need to let the DMV know if you’ve donated, traded, or sold your car. You can do this over the phone, in person, or online. Follow the procedures for buying a vehicle if you decide to buy another one.
Is there any tax benefit when I donate my car?
Even if the proceeds from the sale are less than the car’s fair market value, the amount you can write off as a tax deduction is typically capped at the sales price.
Conclusion
Charities that accept car donations typically do so through a for-profit or nonprofit fundraising middleman that takes care of the paperwork, towing, and selling necessary to process vehicle donations. Highly satisfactory intermediaries are those who transfer 75% or more of the proceeds, while somewhat satisfactory intermediaries transfer between 60% and 74%.
Avoid companies that donate less than 60% of their net earnings to charity. Simply do your homework on the nonprofit organisation you want to donate your car to and prepare your paperwork if you want to claim a tax deduction. Then giving your car to charity will benefit both you and the cause.
I hope it was helpful. Now, I would like to hear from you. What do you think of this guide? Do have any suggestions to make? Feel free to let us know your feedback in the comment section below.
