A few years ago we donated our car to charity after the transmission went out on our old Mazda 626. The car was worth about $1500 in good working order, so when the transmission went out, we decided to cut our losses and just say goodbye.
At that point we were in a tough financial place and we just wanted to move on as quick as possible and be done with it. It was a great example of how financial pressure can sometimes cause you to make worse financial decisions rather than better ones. But either way, we just called the first place we found that would allow us to donate our car to charity.
I don’t remember which company we used, but we just left the keys under the floor mat with the title (really great idea wasn’t it?) 
and they came and picked it up. A month or so later, they sent us a statement showing how much would be eligible as a tax deduction. I think it was only about $700 or so.
While we haven’t donated any more cars to charity, I have since learned a little bit more about the process and some things to avoid.
Find the charity, don’t let them find you
As with many charities there is a lot of money spent on acquiring donations. In fact, some spend the majority of their funds on acquiring more donations – leaving a lot less for the actual charity recipients themselves. This is why some people choose not to give to charities that solicit donations.
With the car donations, it is even worse. There are many For-Profit companies that advertise as a means of donating your car to charity and they leave very little left for the charity. They typically leave the charity 50% to as little as 10% of the value of the car – and keep the rest as their revenue.
The better way to find a place to donate your car
Since the charity car donation thing has gained so much interest, quite a few charities now have this as an option – even though you may never see them advertise it. So, next time I donate a car, I am going to call charities that I am already familiar with and trust and ask them if they accept car donations. Not every charity will accept them, but you might be surprised how many do.
To find great charities check out Charity Navigator or the BBB.
Drop the car off – if you can
While it may seem obvious, it is a better idea to drop the car off at the charity rather than having it picked up. Your car won’t be picked up for free – they will incur some kind of expenses picking up your car from your house – and these are dollars that won’t be going to the charity recipients. So, if you have the means, dropping it off would probably be a better move.
Transfer of Title
In order for the charity to become “legal” owners of the vehicle, they are going to need to title. It is a better idea to fill out the transfer of ownership section rather than leaving it blank. And it may be a good idea to let the DMV know the transfer as well.
Taking the tax deduction
According to MSNBC, “If your donation is worth more than $500, you’ll have to attach IRS Form 8283 to your tax return. If it’s worth more than $5,000, your documentation must include an outside appraisal. You’ll also need proof of the donation, such as a receipt from the charity and a copy of the title change.”
Photo by Danilo
{ 6 comments… read them below or add one }
As a bookkeeper for a small church, I have NEVER given a statement of worth for a non-cash donation. We’re advised to let the donor determine the fair market value. We do acknowledge the receipt of the gift with a reasonably detailed description of the property.
Be aware that if the charity disposes of the within three years, they are supposed to file a form 8282 describing what they received for it. If the charity actually sold the donated item, the original donor MAY need to file an amended return. (using your example, if you deducted $1500 and they sold it for $700, you may have just lost $800 in deductions.)
For this reason, we have held donated items (dump trucks, motorcycles, jewelry) for several years to protect the donor.
Thanks for the comment too, Bill. I didn’t about the holding period.
I’ve never donated a car to a charity, but when I was younger, my family gave a couple cars away to friends who needed them. The process there is very similar… particularly about not letting them find you. :>)
I love advice like this that can be transferred to difference but similar situations. Thanks for the post.
-Marshall Jones Jr.
Teen Challenge (I think there are several around the country) take car donations.
You can donate a car to any of hundreds of great charities at Cars4Charities. Car donations are fast, free and you can donate car anytime at http://www.cars4charities.org/. You can also donate car that doesn’t run any longer. You’ll get a tax deduction of at least $500 when you donate your car and help a good cause too!
Cars4Charities seems like a really good one to donate cars to. All of the process can be done online.
Teen Challenge is a great resource for donating a Vehicle to. If your looking to donate a car find a Teen Challenge Center near you that accepts them.