Donating to charity is a relatively painless way to get rid of a car when you don't have the time to sell it or don't think you can get what it's worth. While not every car is acceptable, donating a car to a charity lets you deduct its fair market value from your taxable income.
Find a charity that accepts cars without charging a large removal fee. Make sure the organization is a registered 501(c)(3) charity or qualified religious organization that can lawfully accept your donation and from which you can lawfully claim a deduction.
Determine the fair market value of your car. According to the IRS, you are responsible for determining this; use the Kelley Blue Book or IRS Publications 526 ("Charitable Deductions") and 561 ("Determining the Value of Donated Property"). If it's worth $5,000 or more, have the car appraised by a certified professional.
Get a tax receipt with the charity's name and federal tax ID number, donor's name, date of donation, as well as the year, make and model of the donated car.
Notify the DMV and your insurance company that you no longer own or insure the vehicle. Follow state regulations on what to do with the title and plates. Keep your receipt and completed IRS Form 8283 for tax time.
Religious organizations aren't required to apply for an IRS tax exemption in order to be qualified. The tax break or refund could be the same amount as if you'd sold the car, but without the bother. IRS Publication 78 (at irs.gov) can verify if an organization is qualified to receive deductible contributions.