Making a charitable donation can help those in need and allow you to feel like you are making a positive contribution to the world around you. It's becoming increasingly more popular for drivers to donate their old vehicles to charity, but there are some pitfalls you want to avoid if you are hoping to help out a local charity by donating your own vehicle.
Here are three tips that you can use to ensure your charitable car donation is a profitable one.
1. Make sure that you partner with a charity experienced in receiving car donations.
In order for a charity to turn your donated car into cash they can use to help those in need, the car will need to be sold for scrap metal or to a new driver. This process requires a significant amount of research and resources, so only those charities that already have experience accepting car donations should be targeted when you are thinking of donating your car.
Experienced charities will be able to reduce the amount of money required to sell your vehicle for a profit, allowing you to rest assured knowing that your vehicle is generating the maximum amount of money possible for the charity.
2. Make sure you know how much money you can claim on your taxes.
Many drivers donate their old vehicles to a charity hoping to use the donation as a deduction when filing their income taxes. If you want to claim your vehicle as a charitable donation, you will need to know how much you can claim. This depends largely on how the charity plans to use your car to obtain funding.
If your car will be sold to a scrap yard, then you are likely only able to claim the low book value for your vehicle. If the vehicle will be sold at auction, you could be able to claim the auction price. Be sure to ask the charity how your car will be sold, then use this information when determining how much to claim on your taxes.
3. Be sure to sign over the title.
You need to work directly with the charity to determine who you will be signing your vehicle over to. You don't want to leave the buyer field blank on the title transfer, since this could leave you liable for the vehicle in the future.
Make sure to properly relinquish ownership by signing over the title to the appropriate charitable individual or organization.
Donating your car to charity can be a great way to get rid of an old vehicle you don't need while simultaneously helping out those in need.