Have an old car you’re trying to get rid of? You’re likely considering selling it to make a bit of money. But there’s another option that could net you some cash: donating your car to a charity.
Why donate an old car to charity when you could just junk or scrap it? Donating your car is a nice thing to do – but you have more to gain by donating your car than scrapping it. There are financial benefits to donating an old car, and you could reap thousands of dollars back if you hand your old car over to a charitable organization.
Is Your Old Car Worth Money?
Even the oldest, most worn-out cars are worth something — and that’s just why so many car owners want to get some financial gain when it’s time to upgrade to a new vehicle. You can junk the car, which means handing over your vehicle so a company can pull out the most valuable parts. The metals and wiring in an old car are valuable, which is exactly what junking and scrapping businesses want. Other components, such as radios, can also have value, along with any other undamaged parts.
You may also be able to find buyer for your old car. This, however, depends on what kind of condition your car is in and whether or not it’s safe to drive.
Whether you’re interested in selling or scrapping your car, it’s worth something. Even if you think it’s worthless, there’s still money in any old car — but you do need to determine how you’ll get the most value out of it.
If your car is still in working order, or only needs minor repairs, then that adds even more value. However, in any case, your old car is worth money. And why not try to get as much as it’s worth when passing it along to someone else?
Donating Your Car Can Give You Thousands Back
Believe it or not, giving away your car can actually make you more money than selling it! Whereas selling an old clunker of a car can net you a few hundred dollars, donating your car comes with benefits that you’ll see during tax season.
Donating a motor vehicle to a 501(c)3 charity or a religious organization, as explained by the DMV, can get you a significant deduction on your taxes, which, in turn, can give you thousands back. The tax deduction you get from donating your car can be a huge benefit to you when you file your tax return — but in order to get that money as a deduction, you’ll need to act before the end of the calendar year.
Donate your car before December 31 and it could make a world of difference come tax season. For example, if you’re only barely above a specific tax bracket’s requirements, it can actually push you below your normal tax bracket and save you far more than the value of the car.
Generally, however, you’ll only be earning a deduction equal to the value of the vehicle. If your vehicle is truly not worth any dollar amount, you’ll still be able to report that you made a donation to a charitable organization on your taxes. But for many, donating a car comes with a financial reward — and that amount can be quite significant, netting you the market value of the vehicle. If your old car is functional and holds any market value, you stand to make quite a bit of cash by donating it.
How to Donate Your Car and Make Money
Getting that car donation tax deduction can be enticing, but there’s a bit of a complicated process you have to follow in order to qualify. Follow these steps to ensure your car is donated correctly and according to all of the IRS requirements to prevent you from missing out on this potentially significant tax deduction:
- Choose a charity. You’ll have to make sure the charity you’ve chosen is an IRS-designated nonprofit. You also need to make sure the organization accepts vehicle donations.
- Provide your chosen charity with all of the necessary information about the vehicle, including the make, model, body, VIN, mileage, condition, and the date you last drove it.
- Transfer the title of the vehicle. This may require some paperwork from your local DMV.
- Have the vehicle appraised. This is a crucial step — it’s the key to knowing how much your old car is worth for that tax deduction that will come next spring.
In addition to ensuring you follow these IRS required steps, you should also talk to the charity about its intended use of the vehicle. How the charity plans to put your old car to use will affect what amount you can take in deductions.If the charity is selling or auctioning the car, for example, then you’re only able to deduct the sale price. But, if the charity is planning to use the vehicle or give it to a person in need, then you may be able to deduct the full amount of the car’s value.
Now that you know just how beneficial donating your old car can be, do your homework and learn what steps you need to take to get your own old, unwanted car donated to a local or national charity. During tax season, you’ll reap the benefits – and all you need to do to get started is find the right charity and research your car’s worth.