If you never consider car donation before, here are a few tips on how to handle the process painlessly.
Charities that accept a car donation will have paperwork already in
order for such contributions, and the exchange should be fairly
straightforward. Car donation has become so popular that charities are
now offering incentives to get you to choose them over other
organizations. These incentives vary from free hotel stays to free
bicycles, gym memberships, or car rental coupons. The incentives are
legal, so don't be afraid to choose a charity that offers them.
Once the car donation part is done and the car title has been
transferred, you can then claim the donation as a tax deduction. If the
fair market value of your car is over $500 US Dollars, however, you may
need additional paperwork from the charity, such as a bill of sale after
the organization has disposed of the vehicle.
Here are five solid reasons why you should donate your car:
#1. Selling Is A Pain
Selling a car is a pain in the ass. It’s no secret that selling a car is a pain.
#2. A Wonderful Tax Deduction
If you’re already a charitable person, consider donating your car rather than cash.
If it’s over $5,000, then you’ll need an independent appraiser but that’s usually not a big deal.
#3. It’s Done As-Is
If your car needs improvements, then the organization will make them and
list the improvements on the tax receipts. You won’t have to fix up
problems with your car beforehand. While you could sell your car as-is
on the open market, chances are the number of interested parties is
going to diminish tremendously. Want to donate?
The organization takes care of it all (many offer free towing too!).
#4. It’s Fast
By selling, you don’t get as much for your car as you would by selling
it (presumably). If your car is worth $5,000, you get a $5,000
charitable deduction off your income for the purposes of taxes. If
you’re in the 25% tax bracket, then the deduction is worth $1,250 of
cold hard cash. If you sell the car for $5,000, then you get $5,000 of
cold hard cash. My wife’s car had a blown head gasket that pretty much
killed the engine on her car. So instead, she donated the car to the
local school so that the shop class could work on it. She received a
sizable charitable donation receipt, the school received a car they
could work on, and everyone was happy.