• Car Donation Program Checklist: Things to Be Aware of

    A car donation program is a great way to get rid of an old car. However, before you donate to the first program you find, there are several things to check. Many times what looks like a legitimate program is actually a car donation scam. Make sure you look into the program and ask plenty of questions about the entire car donation process.

    The Charity

    First, check if any charities that you would normally support will accept a car donation. Many will not be equipped for such donations. Otherwise, look around for other charities in the area that do accept cars. It is possible to look into the charity’s history online using sites such as Charity Navigator or the Better Business Bureau. It is best to try to avoid middle men. The charity may be legitimate, but the middle man will keep a large chunk of the proceeds from the car sale. To ensure that the charity gets all of the proceeds, check it out first.  If you do use an intermediary, then ask how much will go to the charity. Many times these companies will only take a flat fee no matter what the final price of the vehicle is. Even if your car would be considered a junk car, the charity can make some money from it by dismantling the vehicle and selling it for parts.


    Before donating a car, ensure that the charity is qualified. Many charities will accept the donation, but only some have status that will let you take a deduction from your taxes. In order for this to happen, the charity needs to be a 501©3 charity approved by the IRS. Most churches, mosques, synagogues and temples will qualify. It is possible to find this information at the IRS website and search under Publication 78. This will also show a list of other eligible charities in the area.


    Most charities will pick up the vehicle for free. But in order to maximize the donation try and deliver it yourself. The charity will have to pay for the towing and delivery and this will come out of the proceeds of the vehicle. Before donating, see about having the vehicle re-titled to the charity. This way no odd parking tickets or other surprises arrive in the mail. Never agree to leave the charity donation papers blank. The charity can change the title again when it is sold. In order to be able to claim the deduction on your taxes, it is necessary to get a receipt from the charity with the amount the charity made on the vehicle.  In some instances the fair market value can be used instead of the actual sale price.


    While it can be tiresome, it is best to keep a detailed paper trail. If the donation value is more than $500, it will be necessary to fill out an 8283 IRS form. Other documentation will be needed if the donation is more than $5,000. By making sure all the paperwork is filled out, the charity will get the maximum amount of money and you will get the best deduction possible.