Donate A Vehicle To Charity and Avoid Destination Charges
You should never, ever be given a bill with destination charges, whether you donate a vehicle to a charitable, non-profit organization or are the recipient of a charitable gift from such an organization. Donated vehicles that are kept in-state are, no matter how many pieces they’re in, should never subject you to any type of charge.
Donated Vehicles For Charities
For starters, a charity that runs its own donated vehicle program is not allowed to charge you a fee to make a donation. If they take donated cars, then they can choose which ones to take, but not to charge you a fee. Even if they end up losing money after the tow fee is taken into account, many non-profit organizations still take such donations, just to “encourage a culture of giving.”
That leaves third-party, usually for profit, companies that manage donated vehicles for the charities that don’t have the facilities (tow truck) to pick up and process cars, trucks, boats, RVs and trailers. If they are actually affiliated w/ a genuine IRS-approved and exempted charitable organization, they are not allowed to charge you a towing fee either, since they’re acting as an agent of the charity
Only a third-party company that wasn’t operating for an actual charity would be likely to charge you for towing (especially without telling you about it first). You should stop your dealings with such a company immediately and check into their charity a little closer, even if that means reporting them to the state Attorney General’s office.
Vehicle Sold At Wholesale Auctions
Also, there is plenty of a market for the raw materials and components of even cars that aren’t running any more. Even if the amount of a refund you get from a donated vehicle that is sold at wholesale auctions is quite small, the value increases greatly as each component is sold and resold again until eventually turning up in an automotive repair on the other side of the country. The appreciation is part profit motive and part transportation fees. It makes your donated vehicle, ultimately valuable, though your charity will see very little of that unless they actually run a surplus auto parts business.
Sometimes for-profit, third-party agents will have a business on the side by where they trade you promotional offers from cruise ships and vouches for hotel stays for the chance to recycle your car. Though the claims of the environmentalism of such a trade as it’s hard to know at what point the additional miles of the object in question (and its eventual function of keeping another car on the road) are offset by the inherent energy involved in finding, extracting, heating and purifying the metal, much less the elaborate network that created that part in the first place.
Regardless, if there is very little benefit to your local charity after the third-party agents they employ take their cut, it may be just as good of a choice to choose to “recycle” the vehicle rather than donate the vehicle and then not bother to take the paltry deduction, anyhow.
Destination charges are usually assessed on drivable cars taken in and out of state. For instance, if you were to purchase a new car from the dealership, there’s often a line on the bill denoting a destination charge. This is to pay for the caravan of cars that is sometimes seen traveling across interstate highways. In fact, it is because of a network of dealerships that destination charges are even assessed for new cars.
The closest thing to a destination fee that you should find when you donate a vehicle to charity is the tow truck fee. However, that fee should also be paid by the charity or the third-party agent working for the charity as part your donation. It is very rare for any type of towing charge to apply to you when you donate a vehicle.
For starters, when you are considering donating a vehicle, you should ask what charity will be benefiting. If you’ve never heard of the charity in question, ask if you can have their tax ID number that identifies the charity as an exempt charitable organization. You may look this up online or call the IRS.
When you donate a vehicle to a non-profit organization, there’s something very wrong if you are then asked to pay for destination charges.
Auto Donation – Before You Donate A Car To Charity
Are You Considering Making A Charitable Car Donation?
If you are deciding to donate a car to charity, you probably want to know how much it will be valued at. This requires you to fairly assess what purpose it will likely be used for as well as its true condition.
When consulting the Kelley Blue Book for a generalized appraisal value, many people fail to consider that even a “poor” rating assumes that the car can move without facing downhill and that it’s capable of getting current tags in the state that it’s registered in.
Of course, by the time many people even think to make a charitable car donation, they’re often far beyond this point. Indeed, since a great many charities (or their third-party, for-profit agents) will more than happily send someone to pick up vehicles that haven’t run under their own power, you can be assured that even the scrap metal has more value than you might think.
Charitable Car Donation
Finding The Value Of Your Car
The first thing to do is to take a look at the Blue Book value, for private party sales. This is the value you can expect to get when you put an ad in the paper and try to sell the car yourself. Before you donate a car to charity, you need to know what other people are paying for it before you get any grand ideas of whittling your tax bill down to nothing.
There will be a section by where you answer a series of specific questions about the condition of the car. You may be surprised just how a few small dings can really impact the resale value whether or not you choose to donate the car. Charity organizations, of course, have the same access to these figures as yourself. So, be honest. If you come up with a condition that is less than “poor,” odds are you’ll have to settle for the paltry sum the auto will pick up at the wholesale auctions.
Is Your Car Donation Scrap Metal?
Unless you’re able to find a charity that will use your car as a car (rather than scrap metal and parts), you’ll have to accept that the charity you choose will get only 30-50% of that revenue after the price of towing is figured in.
If, on the other hand, you’re able to find a charity that has a training program to teach young people the mechanical arts, perhaps there is a way to get a bit more for your car. However, if you’ve got a terrible clunker, you probably ought to forget it. There’s no point in fixing something up if it has no chance of being either valuable or cool.
It may take a while, but after as many as nine months, you’ll get a slip of paper informing you of what your donated car at charity auction sold for and netted the school you donated it to. Colleges are also able to receive auto donations that will be refurbished and resold, to your mutual benefit.
It is also useful to consider that you may receive a higher deduction value if your car is refurbished and donated to a needy individual or family in the area. Some cities run programs like this and are even able to accept should you donate your car to the charity of you municipal government.
Organizations that teach people basic car maintenance and body work are probably not as interested in fast and swishy-looking cars, but will take a serviceable vehicle that has very little wrong with it. If you happen to know what the problem is, all the better, as it will give the charitable organization or NPO something to base a decision upon.
So, consider the value of your car when it’s been fixed up, both a little and a lot when you’re deciding what to do when you donate a car to charity Though not a credit to take off your total tax bill, deductions reduce the income you’re to be taxed upon. The actual amount of money you’ll save (or be refunded) is dependent upon your tax bracket.
However, by taking some time and effort when you donate a car to charity, you can vastly increase the amount of money your car is worth as a deduction under the new IRS rulings affecting auto donation and deductible amounts.
