The Donating Process

The process of donating your car to charity is simple: Call the charity and someone will come and pick up your vehicle, or tell you where to bring it. However, with so many charities to choose from and so many people trying to scam the innocent, picking the right organization is not always easy.

What to Do First

Before you hand over the keys to your car to a charity, the IRS advises that you:

• Research the charity.

• See if you will receive a tax benefit for your donation.

• Look up the value of your car (however, you can only deduct the actual amount the charity sells your car for).

• Ask if you, as a donor, have any other responsibilities.

In addition, you may want to consider:

• How will your car be used?

• Will the money from the sale of your car be used locally or outside of your community?

• Which programs or services within the charity will receive funding from the sale?

• What is the efficiency rating of the charity? (A lower rating means more of your donation goes toward administrative costs, not to the programs and services you want to support.)

For more information on this and tax-related matters, read the IRS's A Donor's Guide to Vehicle Donations.

Finding a Charity

Forbes ranks America's 200 Largest Charities and, in some cases, discloses their financial details, which may help you make informed giving decisions. Be sure to visit the Better Business Bureau (BBB) in your area, if you are interested in local charities. Or the BBB Wise Giving Alliance.

Notice of Transfer

Be sure to visit our guide to Title Transfers to learn how to transfer the title over.

Tax Write-Off

The IRS has clamped down on how much you can write off on donated cars. No longer can you submit a vehicle's full value. Now, instead, you can only claim the amount for which it is sold. For example, if your vehicle has a Blue Book value of $1,600, but the charity only sells it for $725, you must submit the lower deduction.

Your charity must give you a deduction amount within 30 days of handing your car over, or, if it applies, within 30 days of it being sold. If you're not notified within this time span, call your charity. The amount will come in the form of a mailed letter. Use this as your receipt, or what the IRS calls your acknowledgment.

If the deduction exceeds the IRS's normal $500 limit, your acknowledgment must contain the following information:

• Your name and taxpayer identification number.

• The vehicle identification number.

• The date of the contribution.

• And one of the following:
  • ―A charity statement verifying that no goods or services were provided in return for your car donation.
  • ―A description and estimate of the value of goods or services, if any, exchanged for your donation.
  • ―A statement that goods and services provided by the charity consisted entirely of intangible religious benefits (if applicable).

Where to Donate

The choice is yours. But before donating, confirm that your charity of choice is recognized by the IRS. Otherwise, your deduction will be rejected. If in doubt, check the IRS's Publication 78. It lists qualified charities; religious organizations aren't listed, though they do qualify. Or, either contact the Better Business Bureau (BBB) in your area or the BBB Wise Giving Alliance.

If you're still undecided, Forbes ranks America's 200 Largest Charities and, in some cases, discloses their financial details. Keep in mind, however, that not every charity listed here accepts car donations.

How to Cancel Plates and Tags

The laws for this vary by state. Some states require surrendering the vehicle's license plates to the DMV. Others require submitting a sold notice. And there are a few states that require no formal notification at all.

Check with your DMV for requirements.