How to Donate Cars to Charity

By Robert Vaux

Overview

Donating a used car to charity is a simple way to get rid of a vehicle without all the hassle. Not only can a charity make proper use of the asset, but you will qualify for a tax deduction equal to the value of the car. Before you donate, however, it pays to do research so that both you and the charity you wish to help obtain the maximum possible benefit.

Step 1

Select a charity that accepts used cars. If you want to receive a tax deduction, the IRS needs to recognize the charity as a 501(c)(3) organization. (See Resources below for more information.) Major churches, mosques or synagogues are usually reliable bets.
Step 2

Confirm the value of your vehicle through an independent outlet. The Kelley Blue Book is usually the go-to resource for this (see the link below). Be sure to note any additional repairs the car might need and the projected cost of those repairs.

Step 3

Contact the charity and ask what steps need to be taken to give them the car. Find out how much they charge to tow the vehicle, and make sure the pertinent paperwork is filled out correctly. For cars worth more than $500, you'll need to fill out an IRS 8283 form. If it's worth more than $5,000, you'll need to get a direct appraisal from an independent source. This allows the IRS to confirm the car's value since many charities will sell it for cash rather than using it.
Step 4

Drive or tow the vehicle to whichever drop-off site the charity requests. Be sure to take the keys and the pink slip with you, and follow any other instructions the charity gives you. When you drop off the car, make sure you hand it over to someone you know and that you get a signed receipt for the vehicle.

Skill: Moderately Easy
Tip: It always pays to keep copious paperwork for all transactions involved in donating your car to charity. This includes email and other correspondence as well as IRS paperwork and bills of transaction. If something comes up, you want to have a clear and accurate record of everything you did.
Warning:
Whenever possible, try to give the car directly to a charity rather than going through a middleman. Intermediary organizations will claim a stiff percentage of the car's value as a fee, which you will not be able to deduct. Not only does that hurt you, but it means that the charity will receive less than the car's full value on the other end.

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