What to do with a car you don’t use anymore can be a dilemma. You can sell it, but then you have the hassle of getting the word out. Do you place an ad or just tell friends and hope they spread the word? Do you put out flyers or even place one of those index cards on a bulletin board at a grocery store? And then once you get the word out, you spend an inordinate amount of time talking with interested parties, making arrangements to meet, and then half the time they don’t show up. Then, if you’re lucky, you sell the car, but only after they haggle you down below your asking price. Often it’s all just too much of a headache. A great solution taxpayers have available these days is donating a car to a worthy charity and using the donation as a write-off. Here are some tips on what to do and what to expect:
1) Make sure to find the fair market value of your car before you begin the process of donating it. Edmunds and Kelly Blue Book are the prime resources for finding car values. You are required to perform this step, as the charity you donate your car to will not. Be sure to also determine your car’s value using applicable law.
2) Don’t just assume that your car will be accepted as an approved ‘program car.’ It must pass all necessary requirements and will be inspected before final determination is made.
3) Always research a charity before you make any donation. You have to make sure you will actually receive a tax benefit by donating your car. Don’t find out after you donate your car that the charity you gave it to was not approved. Check with the IRS for the status of all charitable organizations if you want to take the tax exemption for donating. All organizations that accept car donations must be IRS-approved 501(c) (3) organizations.
4) Once you find a reputable charity that is approved for taking car donations, be sure to inquire about exactly what is expected of you as the donor.
5) Deliver the car yourself and always get a receipt for the fair market value determination you have made for your donated car.