Car Donation FAQ

Answers to Car Donation Questions

Common Vehicle Donation Questions

  1. Does it Cost Anything to Donate Your Car?

    • No. Most reputable Charities do not charge to accept your donated vehicle. In rare cases, the charity may ask you to pay for towing charges if the value of the vehicle is less than the cost of towing. Beware of "Charities" that ask for fees to donate your vehicle.

  2. What Happens to the Car After I Donate It?

    • Typically one of three things:
    1. Sell your car and use the proceeds to fund its charitable programs.
    2. Give the vehicle to a family or person of need, after making necessary repairs.
    3. Use for teaching in auto repair and body shop programs.

  1. Does the Car Need to Be Running?

    • No. Although many charities accept only cars in good running shape, many accept most vehicles, even if not running. If your car is more than 10 - 15 years old, or needs extensive work, it may be more difficult to donate.

  2. How is the Vehicle Transported to the Charity?

    • Some programs will pick up local vehicles. Other depend on donors to drop vehicles off. Some will tow (and occasionally charge a fee) car that are not running.

  3. Can I Use the Donation as a Deduction on My Taxes?

    • Yes, in most cases, but only if the Charity receiving the vehicle is a 501(c)3 tax-exempt organization. Donations to 501(c)4 and other tax-exempt organizations are generally not tax deductible. More information can be found by clicking the Tax Info tab above or by visiting IRS.gov.

  4. How do I Calculate my Tax Deduction?

    • Tax Law changes, effective January 1st, 2005, limit the allowable deduction to; 1) $500 or the amount the Charity receives from the sale of the vehicle if sold or 2) the "fair market value" if the vehicle is used by the Charity or gifted as part of its mission.
    1. If Sold by the Charity (most common):
      • You may immediately claim up to $500 for your vehicle, and many programs will send you a letter supporting a claim up to $500 immediately. If the claimed value is greater than $500, you can claim the gross proceeds (excluding towing and other fees) the Charity received from the sale of your vehicle.
      • Several factors influence the sale price including; wholesale prices (typically 20% less than retail), vehicle age, condition and where the vehicle is sold. The Charity is then required to send you a statement of sale price within 30 days of the sale (the sale could take several months).
    2. If Used or Gifted by Charity (ex. given to a needy family):
      • You can still deduct "fair market value" (the price which the property would have sold in the open market). The Charity is required to send you notice that you have donated your car for "fair market value" within 30 days of donation.
      • If you are able to deduct the fair market value (FMV), you will need an appraisal for any vehicle valued at over $5000. To determine the value of vehicles less than $5000, an appraisal can still be used to determine the value, but you will be charge for it. FMV can be estimated using resources such as region Kelley Blue Book values.
      • If your vehicle deduction totals more than $500, you will need to file IRS Form 8283 (Non-cash Charitable Deductions). More information can be found on IRS Publications 561 and 526. You can find these forms and more information at www.IRS.gov/formspubs/index.html.

  5. What are the Benefits of Car Donation?

    • Benefits of donating a car to Charity include;
    1. Supporting the Charity and its programs, tax deduction, and ease of disposing of the vehicle.
    2. Many vehicles are used for work transportation programs and vocational educational programs for the unemployed.
    • Other Benefits:
    1. Reducing Air Pollution. Car donation programs have removed thousands of vehicles from the highways, some of which are ten years old or older and have a high level of emissions - polluting the air and damaging the ozone layer.
    2. Increasing Reuse. Donated vehicles sold to wholesale dealers or recyclers. Many vehicles are repaired, sold and reused by the public.
    3. Increasing Recycling. Salvaged cars are parted and the parts are reused. Car parts not suitable for reuse are recycled. The availability of these parts means a cost savings passed on to the consumer and less waste to landfills. Every ton of steel we recycle saves 2,500 pounds of iron ore, 1,400 pounds of coal and 120 pounds of limestone.

  6. Are there things to Beware of when Donating your Car?

    • Yes. Many car donation programs are for-profit used are dealer/fundraisers where the charity may receive as little as 10% of the proceeds. You will not be able to claim a deduction unless the Charity is a 501(c)3, and typically needs to be donated directly to the Charity with the name of that Charity placed on directly on the vehicle title.

  7. What Things will I Need to Donate my Car?

    • Most require a title and lien release and at least one set of keys. Many require the car to have 4 functional tires.
    • Several items will be useful when calling to donate your car:
    1. Your title and lien release
    2. The year, make and model of your car
    3. The general condition of your car
    4. The vehicle identification number (VIN) (on insurance card or at base of windshield on car)
    5. Your social security number (required by the IRS)