Sitting in your garage is a vehicle you no longer need or want. You bought the new car a year ago and since then, that older car is just itching to get out for a drive again. If this situation sounds familiar, you might be interested in giving your car up for charity’s sake. A donation to your favorite cause or charity is a great way to receive tax relief and a nice way to help others at the same time. However, as nice as it sounds to give cars to charities there are so many questions left unanswered. Here is some basic information for making decisions about car donations.
The length of time it takes to process vehicle donationsAfter the paperwork is filled out with all the necessary information (make, model, year, license/VIN, location of vehicle, etc.) and you, the donor, pick the charity, the donation can typically be picked up. With all car donations sold at an auction to quickly speed up the liquidation process and assure fairness, faxed copies can not be sent into the establishment. Original transfer documents are required.
How much tax deduction is available?With non-cash charitable contributions, tax deductions are based on what the fair market value is for the vehicle you are donating. Often if the donations are worth less than $5000, the IRS allows for the donor to determine what the fair market value is for your donation. The Kelly Blue Book Auto Market Report is a useful guide to help you figure out what the market value is for your car. Car dealerships are useful as are local newspapers and trade publications.
How much of my donation is going to the charity?With the costs associated with picking up the vehicle donations as well as the paperwork, the ending percentage shows that about 50 percent of the money raised from your donations actually donated to charity. However, this number will vary, depending on each individual charity or organization.
When does the insurance get taken off for vehicle donations?State laws vary so much, this becomes a hard question. The best advice I can give is to check with your current auto insurer and get information on when you can cancel. A majority of the time you are responsible until the car donation transport company picks up the car. Other miscellaneous things to remember are that if registration fees have already expired, then you are responsible for getting the cars registered before the company picks up the vehicle donation. If the registration expires after the vehicle is picked up, you are not responsible.
One of the most important questions to ask yourself is what kind of vehicle donations are accepted? Obviously, a charity is going to make just about as much money off a lemon as you would, so the car has to have potential value or be a classic. Titles are also required for such donations. The title has to have the signature of the owner on the title. If there are other names on the title, you need all signatures listed.
By Emily Thomas