Car Donation Tax Updates

Car Donation - More Bang for your Buck

March 10, 2008

If you’ve got a vehicle and you’re trying to determine how you should go about disposing of it, you’ve probably looked at various options: whether trading it in, selling it yourself, giving it to a friend or relative or just giving up and junking it.

However, there is one method that is often overlooked – donating the car (or any kind of vehicle for that matter) to a charity/charitable organization for a tax benefit.

More people are donating their vehicles as you’d suspect. According to the BBB an estimate of 8,000 – 10,000 cars, trucks, motorcycles, boats and other vehicles are donated every year in major cities across the U.S.

What’s driving all of these people to donate their cars? No one can say for sure but there are some definite perks to donating, such as free pickup and a quick and easy way to get rid of your vehicle and all the headaches along with it. And who can forget the tax deduction you get for making a noncash charitable donation?

The only question is. How much can you deduct?

This varies, and is determined by many factors, such as how much the vehicle sold for, what the charity intends to do with the vehicle (If they are going to repair the car donation and give it to someone needy, or sell it at auction & use the proceeds for the charity so they can continue their good work)

There are also many car donation charities to choose from. A simple search on Google for “car donation California” yields many results.

One thing to be aware of when choosing a car donation charity is to avoid scam charities with false claims. These are very easy to spot; they boast such things as “Free Gift” with donation, “Full Fair Market Value” and others. Be wary of a “Free Gift” with donation, as that means you have to subtract the value of that gift from the amount that you can deduct for your donation.

But don’t let that turn you off from donating. It’s a great way to dispose of your vehicle and help your fellow man.