If you have an old vehicle you want to get rid of, you’ve got a few options.
You can sell the car yourself, and VINvaquero.com certainly has the resources to help you with that, or you can donate it to a charitable organization.
While the paperwork to donating your car is similar to selling your car, the main benefits are that:
- Car donation charities will typically accept vehicles in any condition (running or not).
- Charities will handle transportation of the vehicle themselves.
- You’ll be able to write-off the car donation on your taxes.
Does it sound like donating your car is the right move for you? Great! Check out the steps and answers to some of the most common questions below.
Steps to Donating Your Vehicle
The steps to donating a vehicle are as follows:
- Find a charity.
- Satisfy the IRS tax requirements.
- Get your DMV paperwork.
- Complete the transfer of ownership.
- Cancel your car insurance policy.
Aside from finding a charity and any tax write-off considerations, donating a vehicle follows basically the same process as selling your car.
Learn more about each step below.
1. Find a Car Donation Charity
There are a variety of charities that will happily accept car donations.
The trick is finding the right one that aligns with your own values, satisfies the tax requirements you’re interested in, and makes the process as easy as possible.
Most charities that regularly accept vehicle donations make it very simple to get started. You’ll typically visit their website, fill out an online form with information about the vehicle, and they’ll contact you to help you complete the process.
Nation-wide charities that accept car donations include Goodwill, Disabled American Veterans, Make-a-Wish, and Habitat for Humanity.
If you’re planning to donate to a smaller charity, it is worth your time to do a little research first.
First, make sure that the charity is set up as a 501(c)(3) in order to qualify for tax-deductible donations. You can use the IRS Tax Exempt Organization Search Tool to check.
Next, use an organization like CharityWatch to get better insights into how your donation will be used.
2. Know the IRS Requirements to Receive a Tax Benefit
If you plan to write-off your car donation on your taxes, you’ll also need to make sure your receive the right paperwork throughout the process.
You’ll typically need a receipt of the donation that includes:
- Your name and SSN.
- The car’s Vehicle Identification Number (VIN).
- The date of the donation.
- The details of the donation (whether the car will be sold or used in the charity’s operations).
If the charity sells the car, the should then send you a tax form (usually Form 1098-C) that includes the following information:
- A statement that certities the vehicle was sold.
- The date of the sale.
- The proceeds of the sale.
When a charity sells the vehicle you’ve donated, your tax deduction will be limited to the proceeds of the sale.
If the car is running and the charity plans to use it in its operations, you’ll typically be able to deduct the fair market value of the vehicle.
Once you file your taxes, you’ll need to submit the forms and documents received from the charity along with IRS Form 8283.
Note that you’ll also need to itemize your deductions, rather than opting for the standard deduction.
3. Gather your DMV Registration & Title Paperwork
The next step involves transferring the ownership documents to the charity organization you’ve decided to donate to.
This step is pretty much the same as selling your car. For more details, check out our related articles:
First, you’ll need to fill out the release of interest section on your Certificate of Title.
Depending on the age of the vehicle, you may also need to complete the Odometer Disclosure Statement.
It is also a smart idea to complete a Bill of Sale for your records.
If the car is running and the registration is active, you may also be responsible for having a current smog check and vehicle inspection, depending on the state you live in.
Next, the representative from the charity should fill out the New Owner section on the back of the title.
You should be sure to receive all the necessary tax documents from the charity at this point as well.
After the transfer is complete, you may also need to file a Notice of Transfer and Release of Liability with your state DMV.
4. Transfer and Hand Off the Vehicle
At this point, your end of the transfer is pretty much complete.
You’ll just need to schedule for the pick up of your vehicle, and the charity should be able to take it from there.
5. Cancel your Car Insurance Policy
Finally, you’ll want to cancel your car insurance policy.
This further removes your liability from the vehicle.
Note that if you were benefiting from multi-vehicle discounts on your car insurance premiums, your rates on your other vehicles could go up.
Whenever making changes to your policies, it’s a good idea to compare a few quotes from different providers. You can get started here at VINvaquero.com for free.
Can you donate a car that doesn’t run?
If you have an old car that doesn’t run, donating it can be a great option.
Most charities that accept car donations will gladly accept vehicles that are not in running condition.
Can you donate a car without the title?
Just like when selling your car, it’s always easier to donate a vehicle when you have the current vehicle title in your name.
Donating a car without a title can be a hit or miss depending on the charity you go with and the state you live in.
If you’re able to, it’s always a good idea to apply for a duplicate certificate of title before you plan to donate the vehicle.
Having the title in hand will typically make the transaction easier and cleaner to complete.