Car Donation to Charity - Know the Road Rules

It is hard to let go of a beloved old car that is beyond even a trade-in. Sending it right to the junk yard can be heart wrenching. Making a car donation to a worthy charity seems like a good move, but, unfortunately, car donation is an area of charity that is rife with fraud and misleading information.

The ads that you see everywhere that offer to help you make a car donation to charity are almost always rip-offs. In most cases, these are middle-men who give only a fraction of the car donation worth to the charity. Car donation middle-men are not required by the IRS to contribute a certain amount of the auto's proceeds to a charity. The amount the charity receives from a car donation is negotiated by the charity and the middle-man.

No matter what celebrity promotes these car donation programs, do not use them for your car donation unless you can verify that the car donation agency gives a significant percentage of the proceeds from your car donation to the charity. If you are going to do that kind of research, you might just as well use that time to find a charity that can take your car donation directly. Ask your favorite charities first...they may have a car donation program.

Instead of calling the first telephone number you see on a billboard for car donation, follow these steps to make a car donation to charity.

Rules of the Road for Your Car Donation to Charity

1. Find a charity in your local area that will accept your car donation directly. This will require some research, but you will feel ever so much better when you find a worthy group that will benefit directly from your car donation.
   
   Make sure that the charity you choose for your car donation is a 501(c)(3) organization. These are the only nonprofit groups that can provide a tax deduction for your donation. Check the organization's website for proof of its charitable status, look it up on the Better Business Bureau's nonprofit list, or check it out on Charity Navigator, an organization that rates nonprofits across the country.
2. If possible, deliver your car donation to the charity yourself. A charity will have to pay someone to pick it up. Save them that expense by driving the car directly to the charity. Make arrangements with the charity first, of course, so that the proper paperwork for your car donation can be prepared.
3. Protect yourself from future liabilities that could result from a car donation. There are some sad cases of people making a car donation and then being held liable when that car was later in an accident. Make sure that the title is transferred properly to the charity. Check with your state's Department of Motor Vehicles about how to do this properly. Never leave a blank space on the title for someone else to fill in. Do not leave the ownership space on the charity car donation papers blank. If the charity asks you to do that, find another organization.
4. Understand the IRS rules for your car donation. First, a tax deduction is only available for your car donation if you itemize your deductions. An estimate of the value of your vehicle will not pass muster at tax time. Since most cars (or boats) donated to charity are resold, you must know the resale price of your car donation for your tax records, if the car or boat is worth more than $500. Make sure that the charity sends you this record.
   
   If the charity keeps the car or boat and uses it in its charitable work, or if your car is worth less than $500, then you can report its "fair market value" (FMV).
   
   Making a car donation to an organization that has as its mission to provide low cost vehicles to low-income buyers also allows the donor to deduct the car's fair market value or $500, whichever is less. You can use a resource such as Edmunds' FMV Used Vehicle Appraiser to determine the FMV, which depends on what a used car sells for in your geographic vicinity. The FMV may be lower than the so called "blue book" value.
5. Keep a paper trail of your car donation. If your vehicle or boat donation is worth more than $500, attach IRS Form 8283 to your tax return. If it’s worth more than $5,000, you must include an outside appraisal. Proof of the donation, such as a receipt from the charity, is also required by the IRS and a copy of the title change.

   You can get more information from IRS Publication 4303, "A Donor’s Guide to Car Donations."

Even though making a car donation to a charity might seem like more work than it is worth, do make the effort. Do it in the name of that car that served you well, and to help out a worthy cause. Making a car donation to charity really is a better alternative than a direct trip to the junk heap.

Some charities that accept a car donation directly or through reputable car donation agencies include:

• Habitat for Humanity
• Opportunity Cars
• Vehicles for Change
• Good News Mountaineer Garage
• CarTalk Vehicle Donation Program (Car donation benefits public radio stations.)
• 1-800-Charity Cars

Appraising Value Before You Donate a Car to Charity

What nearly everyone wants to know before they even decide to donate a car to charity is how much it will be valued at. This requires you to fairly assess what purpose it will likely be used for as well as its true condition. When consulting the Kelley Blue Book for a generalized appraisal value, many people fail to consider that even a poor rating assumes that the car can move without facing downhill and that it’s capable of getting current tags in the state that it’s registered in.

Of course, by the time many people even think to donate cars to charity, they’re often far beyond this point. Indeed, since a great many charities (or their third-party, for-profit agents) will more than happily send someone to pick up vehicles that haven’t run under their own power since the Regan Administration, you can be assured that even the scrap metal has more value than you might think.

The first thing to do is to take a look at the Blue Book value, for private party sales. This is the value you can expect to get when you put an ad in the paper and try to sell the car yourself. Before you donate a car to charity, you need to know what other people are paying for it before you get any grand ideas of whittling your tax bill down to nothing.

There will be a section by where you answer a series of specific questions about the condition of the car. You may be surprised just how a few small dings can really impact the resale value whether or not you choose to donate the car. Charity organizations, of course, have the same access to these figures as yourself. So, be honest. If you come up with a condition that is less than poor, odds are you’ll have to settle for the paltry sum the auto will pick up at the wholesale auctions.

According to a General Accounting Office investigation in 2003, automobiles that were sold this way netted between 5-10% of what the fair condition listing was. Sometimes it’s hard to imagine such a paltry sum for something you’ve spent many hours of your life in. Tell yourself, she’s in pain let her go.

Unless you’re able to find a charity that will use your car as a car (rather than scrap metal and parts), you’ll have to accept that the charity you choose will get only 30-50% of that revenue after the price of towing is figured in.

If, on the other hand, you’re able to find a charity that has a training program to teach young people the mechanical arts, perhaps there is a way to get a bit more for your car. However, if you’ve got a terrible clunker, you probably ought to forget it. There’s no point in fixing something up if it has no chance of being either valuable or cool.

It may take awhile, but after as many as nine months, you’ll get a slip of paper informing you of what your donated car at charity auction sold for and netted the school you donated it to. Colleges are also able to receive auto donations that will be refurbished and resold, to your mutual benefit.

It is also useful to consider that you may receive a higher deduction value if your car is refurbished and donated to a needy individual or family in the area. Some cities run programs like this and are even able to accept should you donate your car to the charity of you municipal government.

Organizations that teach people basic car maintenance and body work are probably not as interested in fast and swoopy-looking cars, but will take a serviceable vehicle that has very little wrong with it. If you happen to know what the problem is, all the better, as it will give the charitable organization or NPO something to base a decision upon.

So, consider the value of your car when it’s been fixed up, both a little and a lot when you’re deciding what to do when you donate a car to charity Though not a credit to take off your total tax bill, deductions reduce the income you’re to be taxed upon. The actual amount of money you’ll save (or be refunded) is dependent upon your tax bracket.

However, by taking some time and effort when you donate a car to charity, you can vastly increase the amount of money your car is worth as a deduction under the new IRS rulings affecting auto donation and deductible amounts.

Why Make a Car Donation?

Car Donations may be one of the best ways to help the less fortunate. It is simple, since they are providing something that no longer needs to help those who desperately need it.

People think that the majority of donated cars are made by people who have a car, but this is not necessarily true. These donations come from people who often donate their cars when they believe they do not need. Some people who donate cars because they do not have good trade value for the car. At times, trade in value is much smaller than the car really worth it.

It sometimes happens that a car is in good shape and runs well, but due to their age their efficiency is low. What you going to do? You can sell or give to someone who needs it. But if you do not find a buyer, then it is best to donate to a charity. Donations of cars are quite good, and give you an opportunity to help many people. Used as a tax deduction.

If you are fond of donations then you must have heard of people donating clothes, toys or furniture, etc. Car donation is no different. Just consider the following points before making a donation:

• Make sure that you are donating to a charity that is approved by the government.
• The easiest way to be sure is that 501 (c) (3) the certification given by the government in an organization with respect to the tax exemption.
• Decide "blue book" price for your car. This will help you get the fair market value of the vehicle.
• Take the receipt of donations from your car.
• The receipt of information should make and model of vehicle, year of the car, and the date of donation.

Maryland Car Donation

Despite seeming daunting and pretty complex, car donation Maryland is a pretty straightforward process. First off you will need a car,truck or vehicle that is no longer needed, and you are actually prepared to donate to a charity group. Then you need to have a think about a few details.

Never donate a car, truck, or any other vehicle that needs expensive repairs or extensive maintenance. Also ensure the vehicle is safe. Nobody will get any benefit from a vehicle that is going to die as soon as it is used. These organizations help people in need. Help them to help others.

The next question that you need to answer is, “Where will the car donation go?”. Naturally most folk want the vehicle they donate to end up where it is most needed. There is no shortage of people in need who could really use a reliable vehicle that you might have lying around idle collecting dust in the back yard.

The final question you need to ask yourself is, “Which charity should I donate my vehicle to?”. From the comprehensive list of charities you can donate a car, boat or other vehicle type to, you will need to select one. We’d all like to give something to all of these worthy organizations, however you’ve only got one vehicle to donate, so you will need to select which one of these groups you feel is the most deserving.

The choices mentioned above are good for organizations and groups, but what if you want to donate to disadvantaged people? Well students always need vehicles. Maybe a family member might need your old vehicle. If you know somebody who’s destitute, but looking for work a reliable car can be a godsend for them.

Most people like the feeling they get from donating to others without wanting anything in return. There are however some that will only do something like Maryland car donation if there’s a quid pro quo. Well, even they will enjoy the potential reduction in their taxes. Many organizations, including some cities, will give donors a tax credit, or even pay cash for vehicle donations.

Then there are medical research groups devoted to eradicating disease. The donation of a vehicle to one of these groups can save them money that can be put towards more research. You can call a lot of research organizations in your area and see if they will accept, or need donations of operating vehicles.

For folk who are actively involved in their neighbourhood, one group they may have missed is in their own hometown. Many towns need cars for their employees to get around doing errands. This will help save the city several thousand dollars and free up the cities funds to be appropriated to other needs. Donating a car to your city will indirectly help the whole city.

There are so many folk who can use a reliable vehicle, as well as organizations. The ripple effect from donating a working vehicle must not be underestimated though. Keep in mind when donating that one day you may be on the other end of the process. The choice of whom to donate to is yours to make. Best of luck.