In This Article
Overview

Donate your car after a charity check

Last reviewed: December 2008
Car charities
 

’Tis the season to be charitable. For some people, that means donating a vehicle. You can donate your car through a local chapter of a national organization, including the Red Cross, Habitat for Humanity, and many others. Or you can contact a group that specializes in car donations and will pick up cars, sell them at auction, and give a charity some of the proceeds.

We’ve heard such groups touted in radio ads, and search engines yield plenty of names, but our research indicates donors should be careful. None of three car-donation Web sites we looked into had a privacy policy, and two lacked complete contact information. Often the charity gets 5 percent or less of the car’s claimed value, according to a 2003 survey by the Government Accountability Office. Before you donate your car, ask :

Is the charity IRS-approved?

Ask the charity whether it’s qualified to receive tax-deductible contributions. Most approved charities are listed online in IRS Publication 78 (www.irs.gov/app/pub-78).

How will the car be used?

The IRS says a donated car worth more than $500 that’s kept in use by the charity—bringing meals to seniors, for instance—can be deducted at its current fair market value. But if it’s sold at auction by the charity, you can deduct only the auction price. If the charity takes cars that can’t be driven, the donation might be worth no more than a lug nut.

How much money will the charity get from a third-party arrangement?

Ask the charity’s development office. Look for a share of at least 15 percent.

How much will the charity use for good deeds?

The Better Business Bureau recommends giving to charities that devote at least 65 percent of donations to good works. The BBB’s National Charity Reports Index (www.bbb.org/charity) rates charities on 20 standards. Charity Navigator (www.charitynavigator.org) has information, too. Both services are free.

After you donate your car, record the name and address of the charity and the date of your donation. Get a receipt. Keep a copy of the title transfer. Report the transfer to your state motor-vehicle department and cancel your car insurance.

Remove the vehicle’s license plates—unless state law says otherwise—and the registration and inspection stickers. That way, you won’t be sideswiped by a later owner’s violations.

Posted: October 2008 — Consumer Reports Magazine issue: December 2008