Why Do Charities Need Old Cars?
Many different kinds of charities, from organizations that aid abused women to groups that find homes for abandoned animals, have found that charity car donations are a great way to get people to donate and make a profit for their cause. When you donate any vehicle, be it a car, truck, or boat, you get to deduct the fair market value of that vehicle from your taxes. The charity provides you with clear instructions on how to transfer the title over to them, and gives you a receipt confirming that you have made the donation. The charity arranges for the vehicle to be picked up within just a few days, making it a very convenient way for you to get rid of your car and help someone out at the same time.
Once the charity has your car, it is refurbished and then sold at auction. The charity uses the profits to help their organization. There are even a few charities that will take the cars in the best condition and give them to struggling families who need a vehicle.
How Can I Be Sure My Car Goes To Help People?
One of the growing problems in the world of charity car donations is groups that pretend to be accepting your donated car for charity but are in fact keeping most of the profits for themselves. In some cases, they are simply used car dealers, and only 10% or less of the sale of your car is given to charity.
These groups may tempt you to make your charity car donation through them by claiming they can get you the “Maximum Kelly Blue Book Value” on your car, thus increasing your tax deduction. They will then give your car a false or exaggerated value, which puts you at risk of committing tax fraud. Real charities are not legally allowed to give your car a value – you determine this yourself. When you donate your car to a real charity, they give you a receipt that simply verifies that you made the donation, the date, and the name of the charity.
You determine the fair market value by considering the year, make, model, mileage, and general appearance, and then comparing this information to the Kelly Blue Book, which is a lis ting of vehicles and what they would be worth in any given year and in any given condition. It is your responsibility to make a record of this and keep it with your charity car donation receipt for tax purposes. For more assistance with determining the value of your vehicle, see IRS Publication 561 "Determining the Value of Donated Property": www.irs.gov/pub/irs-pdf/p561.pdf
The best way to make certain that you are donating to a real charity is to verify that the charity is truly a non-profit organization (and that your donation is truly tax deductible). The charity must have 501(c)(3) status, which means that they are considered by the IRS to be non-profit. One clue is that the website may be followed by “.org”, instead of “.com” or “.net.” You may also want to donate your car directly to a charity with which you are already familiar or to which you already make cash donations. This way, you can feel secure knowing that the bulk of your charity car donation will go toward helping others.
There are a few major charitable organizations that will collect your car for you and disperse them to other charities, but before you use one of these, do your homework – the Better Business Bureau says that at least 65% of the sale of your charity car donation should go directly to charity.
A charity car donation is a great way for you to rid yourself of a car you don't need and help a charity continue doing its good work. If you are ready to make a donation, contact your favorite charity directly; they have people ready to help you with every step and answer all your additional questions.
By Alisa Elizabeth King Terry