How To Donate A Car To Charity

Reviewed: July 17, 2014
By FinanceWeb

Donating a car to a charity sounds like a win/win situation. You get rid of a vehicle that’s taking up room and costing you money to keep it maintained and insured. A charity gets something it can use to help its recipients, either directly by providing transportation to someone in need or indirectly by selling it to provide money for its programs. However for your gift to do the most good for the most people, including you, donating a vehicle requires more than driving it to the nearest charitable organization and handing over the keys.

Choose A Charity

If the charity you want to help is local, you probably already know if they use their donations in a productive way. If you are unsure of just who the charity helps, or the extent of the help they offer, you need to research them. Web sites like Charity Navigator or Charity Watch can provide data on a variety of organizations. Your community may also have local watchdog groups that can tell you if a charity actually does what it says it does.

Ask If They Want A Car

After you’ve selected an organization, contact them and ask if they will accept a car. Keep in mind that the charity will have much the same expenses as you have, and many organizations don’t have the funding for vehicle costs. If they are willing to take your car, ask if they will keep it or sell it.

Determine The Value of Your Car

If you don’t intend to take a deduction of the value of the car on your income tax return, then you can skip this part. If you do intend to claim a deduction, then you will need to know the value of your vehicle. It is not what the “Blue Book” or similar reference might say. If the charity keeps the car, you will need to do some market research to determine the real value of it. It’s simpler if the charity sells the car, because the value will be what they sell it for. Simpler, but perhaps not to your advantage if they sell it for next to nothing, just to get rid of it. It may be more beneficial to you if you sell the car yourself and donate the cash to the charity.

Do The Paperwork

After a charity accepts your donated car, you need to report a change in ownership to the state Department of Motor Vehicles, Requirements vary from state to state on how to transfer title, obtain a release of liability and cancel the registration and plates. Notify your insurance company you no longer own the vehicle.