When it comes time to replace a car, there are some standard options that are available to you. You can either trade it in, sell it, keep it or donate it.
While the first three options are well known, the last option to donate a car is fairly new and many people don't know how it works. Keep reading for the
basic steps to donate your car to the charity of your choice.
If you want to donate a car that has a value over $5,000, then it should be appraised by a professional that is certified in vehicles. This appraisal may be needed if the government should ask questions later.
Most charities will use donated vehicles to help people get transportation back and forth to work. They sell the cars to clients, the price that they get for the car will be what you will be able to claim on your taxes, not what the car is actually worth, although you will need to know both numbers. For example, if you want to donate a car that is "blue booked" at $7,000 and it is sold for $2,500, you will only be able to claim the $2,500 on your taxes.
Once you decide where you want the donation of your car to go, the market value needs to be determined. The easiest way to effectively determine the
value of your car is to utilize the Kelley Blue Book, this is the same book that dealerships use to evaluate the price of a car when it is being bought and sold.
While you may not get the same amount of deductions on your taxes as you would in cash if you sold it out right, you will be able still be able to help people who need it while saving yourself the time and trouble that is involved with selling a vehicle on your own.
If you are contemplating the donation of a vehicle to a charity, it is important to be sure that you are dealing with one that meets the governments' criteria for a charitable entity. These organizations will be registered as a 501(c)(3) or be a church that has also been qualified by the powers that be. This is the only way you will be able to claim the donation on your taxes.
Don't forget to let the DMV as well as your insurance company that you no longer own and are no longer responsible for the vehicle. They will be able to help you with disposing of the license plate, if this is an issue in your state. Be sure to save the receipt that is given to you, as will as a completely filled out Form 8283 from the IRS.
