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Getting Started with Car Donation Charities

Instead of selling off your old car or having it towed to the wrecking yard, you call up your favorite charity and let them know you’d like to donate it to them. If they have a car donation program, then they will set up the details with you. They will turn around and sell the vehicle, usually at an auction, and then keep the proceeds.

What’s in It for Me?

In addition to feeling good about yourself for supporting a car donation charity, you may also be eligible to get a break on your taxes. After the car has been sold, the charity will give you a receipt for the total amount it brought, and you will be able to use all or some of this on your next income tax return.

Other Ways to Support Car Donation Charities

While car donation charities obviously accept donations of used cars, it’s quite possible that they accept other vehicles, as well. So, if you are looking to get rid of an old boat, RV, or even an airplane, it’s possible that those items can go to help out a nonprofit organization, too.

The Fine Print

There are a few things to keep in mind in order to properly donate your car to charity. For example, most states are going to require you to have the title to the vehicle being donated. In addition, the car donation charity can only make out the receipt to the name on that title. In some states you will also be required to fill out a Release of Liability Form or a Report of Sale Form.

A Few Tips for Helping Car Donation Charities

If you’re supporting car donation charities, then you may be interested in making sure they get the most money possible for your donation. In order to help ensure this, take their needs into consideration, as well as your own. Most charities will pay to have your car picked up, for example, but if you are able to drive it in, then you will save them the towing costs; and more of the money actually raised by your vehicle will go back into their budget.

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First of all, many nonprofit organizations are not actually set up to take automobile donations. There is a lot of work involved in being permitted to collect and process donated vehicles, and not all charitable organization have been willing or able to set up such a program for themselves. If they do still accept donations of this sort, then they must do it through a third party. These companies are often referred to as intermediary agencies.

Do Intermediary Agencies Equal Car Donation Scams?

The short answer to this question is “not necessarily.” Some intermediary agencies are truly serving an important purpose for nonprofit organizations that couldn’t otherwise accept car donations. They are able to pick up the cars, transfer the titles, take them to auction, and distribute the funds back to the nonprofit. Of course, they do all of this for a fee. If the fee is a reasonable one, then it is certainly worthwhile for the nonprofit organization to go ahead and pay it.

On the other hand, it is not unheard of for intermediary agencies to expect 50% or more of the proceeds. This might even be on top of the towing and title fees. In the end, the nonprofit organization could end up with as little as 10% of the actual money raised by a donated vehicle. Even if it’s not technically illegal, it’s not hard to recognize that these are car donation scams.

Other Car Donation Scams

In general, there are two things to keep in mind if you decide to go through an intermediary agency to donate your car. First of all, how much of the proceeds will actually go to the nonprofit organization? There are disreputable companies out there that say they are picking up a vehicle on a nonprofit’s behalf, but then they keep all of the money themselves. This is basically auto theft. In order to avoid this, or even intermediary agencies that just take more than their fair share, talk to the organization you want to support. Ask them if they’ve found the agency to be reliable in the past. Make sure that they’ve not only been receiving a reasonable cut, but that they’ve been getting paid at all.

Finally, be sure that the nonprofit you’re donating to is designated as a 501(c)(3), tax-exempt organization. If they have a different designation, such as 501(c)(4), then you may miss out on the opportunity to receive a tax deduction for your donation. It’s not unheard of for car donation scams to be as simple as just omitting a few details so someone will donate under false pretenses.

The majority of car donation programs are going to be legitimate, but doing just a little bit of homework will keep both you and your favorite charity from becoming victims of car donation scams.