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.
Car Donations and Donating Automobile Parts and Broken Autos to Charities
Since the revamping of the laws regarding car donations, automobiles that are not running have been donated at a somewhat lower rate than they were just a few years ago, but that doesn’t mean you’re stuck with your old vehicle. You can still donate it to charity even if the tax deduction benefit has been slashed dramatically.
Generally when you donate an automobile that doesn’t run, it will be towed away and sold essentially as a parts car. Though most donated automobiles in such condition are dealt with by a third-party (usually a for-profit company) agent rather than the charity itself, you can still get the old hulk hauled away.
However, you should be aware that the deduction value you may claim for a car sold on the wholesale market is greatly limited by the fractional amount it is likely to be sold for as well as the overhead fees that are taken off the top by a third-party agent, the remaining value that is actually given to the charity from the sale of the donated automobile is the extent of what can be written off under the new laws.
Generally, the highest values for donated automobiles are reserved for cars and trucks that are still running, some agencies will accept some broken down cars and trucks for repair. If you can find a school or church that has an ongoing mission of automotive training, even a non-functional auto has the potential to be deducted at the higher “fair market value” in such cases.
Donating Automobiles to Charities
When you donate an automobile to a charity or non-profit organization recognized by the IRS as a charitable organization, it won’t be your job to part it out and sell the pieces. Someone will do that for you after they purchase the whole thing, parts and all. On the other hand, if you don’t have all the parts anymore, as long as it still looks something like a whole automobile, you’ll be able to give it away as such. No one is going to be counting each and every bolt to make sure it’s still there, nor do you have to sign any sort of affidavit that your donated automobile is repairable.
So, regardless of how profoundly it’s not running, donated automobiles are still accepted by a wide range of charitable organizations. Often, they will be larger or national charities that don’t have a specific mission involving getting running cars to people. Unless there’s something particularly cool or somehow unique about your donated automobile that would make it a good project car, you can assume that it will be sold for scrap or parts at a wholesale auction.
If the donated automobile is special, you might want to shop around and find someone who will take the time to put it back into working order. Schools that teach shop classes and other non-profits with an educational mission are the most likely to want to put the time and effort into getting your old vehicle into saleable condition. Though it could take some looking on your part, there are charities available who will come and pick such a donated automobile away.
This approach has the added advantage of providing you with the opportunity for a higher resale and thus, tax deductible value. Of course, it will take a little longer, and you may end up waiting a few months before you finally get the paperwork declaring what your donated automobile was sold for – or the use it was finally put to – within 30 days of the final sale or determination.
Donated automobiles, regardless of how long it takes them to actually find their ultimate end, will be given a receipt of intent when they’re picked up. This means that even if it takes awhile for the donated automobile to become a running machine again, you have the ability to go ahead and file your taxes for the year in which the donation process was initiated.
Despite changes to the law, there are still plenty of places that accept donated automobile that are no longer running. The only thing you need to consider is whether or not it has potential to be fixed up for sale as a running machine.
