There are a lot of good reasons to donate your car to charity. You get rid of a car you do not need, you get a tax deduction of $500 or more and you help a needy charity. It should be very easy and it is easy if you know how to do it properly.
Before you just hand over the title to your car to a stranger, you need to do some research first. Find out what the charity will do with your car donation. Most donated cars need a lot of expensive repairs. For that reason most charities sell car donations. If the charity you choose uses a car donation center, ask them how much of the actual sale price of your donated car the charity will receive. The term “net sale price” means the actual sale price of your car minus the auction fees, selling fees, or other fees charged by the car donation center. In some cases, these fees will be more than the selling price of your car. If that happens, the charity you donate your car to will have to pay the car donation center the difference and will lose money on your car donation. You will not know if you do not ask them!
You should also make a copy of your cars title and make a record of the name and phone of the towing service assigned to pick up your car. You should also mail the title directly to the charity. It is safer for you to have the title in the hands of the charity rather than the hands of the towing service. If you have to give it to the towing service, make sure your only give it to them after you receive your receipt. Never, ever just leave the title in the car! If you do that, you may never get a receipt and in that case you will not be able to provide proof of your car donation.
You should remove your license plates and any stickers on your windshield of your car if you live in one of the many states that require you to do so. In those states, you will not be able to cancel your car insurance until you have returned the license plates to the Department of Motor Vehicles or transferred them to another car. You may also receive parking tickets from the next owner if you forget to remove the stickers from your car’s windshield.
You also need to keep all the correspondence between you and the charity. If you do not keep that correspondence, you will not have any record of your car donation and the IRS may not allow you to claim a tax deduction for your car donation.
The donate car process will be a lot easier if you educate yourself a little first. Avoiding the pitfalls of the car donation process are more that worth the time you will spend on that education.
