How to Make a Car Donation

By Kate Evelyn

  • Overview

    If you have a car that you no longer use, whether or not it is in working condition, you may be able to donate that car to charity. However, simply taking the car to Goodwill and dropping it off, like you would with an old dresser, is not going to cut it with a car donation. There are specific procedures to follow to make sure everything is legal and that there are no unforeseen complications.
    • Step 1

      Find a charity to donate your car to. This could be as easy as checking your mailbox for a brochure, especially if it's around tax time. Charities also advertise for car donations on the radio fairly often. Some nationally charities you can contact that all accept cars are the Ronald McDonald House, Purple Heart, the Salvation Army and the American Red Cross. See the resources section to find your local chapter.
    • Step 2

      Call the charity and ask a representative how it plans to use your car. Some organizations simply sell the cars for scrap, while others use them as part of their work. According to IRS rules, you can only deduct $500 or the selling price, whichever is greater, unless the charity keeps the car "as part of its mission." This means that it will use the car for official transportation or perhaps give it in kind to someone who can't afford a vehicle. If this is the case, you can deduct fair market value. In either case, the charity has to be a registered 501(c)(3) nonprofit.

    • Step 3

      Go to the Department of Motor Vehicles and request to have your title transferred over to the charity. Cancel your registration and insurance on the car and return your license plates. If you decide to skip this step, you could be held liable for red-light camera and parking tickets even if you haven't seen your car in years.
    • Step 4

      Have the car towed to the charity if no one offers to pick it up. Now that the car is no longer registered in your name it's not a good idea for you to drive it over. Once you get to the charity, fill out the required paperwork. Then hand over your keys. Ask the charity for a receipt in case you get audited.
    • Step 5

      Report the deduction amount on your tax return using the criteria in step 2.
    • Skill: Moderate
    • Ingredients:
    • Car to be donated
    • Car title
    • Telephone
    • Tip: It's better to work directly with a charity than to contact "middlemen" who offer to take all of the work out of the car donation process. Chances are these interim organizations will take a hefty percentage of the proceeds away from the nonprofit.

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