When you are ready to upgrade and purchase a new car, you must decide what to do with your old one. Often, you won't get much for it if you decide to trade it in, and selling the car yourself can take weeks or even months. Donating the car to charity has tax advantages. You also gain the satisfaction of helping someone who couldn't afford to buy a car. Many churches accept used car donations and match them with a family in need.
Call local churches in your area to find one that accepts used cars. If you wish, ask what the church does with donated cars. The church might give the car to a family in need or fix the car up, sell it and donate the proceeds to a missionary. Be sure you approve of the church's plan for your car.
Arrange a date and time to drop off the car to the church coordinator or to have it picked up.
Obtain the current fair market value for your car. You can only deduct this amount on your taxes. You can get this fair market value using the "Kelley Blue Book" at your local library or online.
Sign over the title of the car to the church coordinator and ask for a receipt for your tax records. You can give the coordinator your printout from Step 3 to facilitate matters. If the amount is $500 or less, the receipt is all you need for your taxes.
Fill out and attach IRS Form 8283 to your tax return if your car is valued between $501 and $4999.
Get a professional appraisal of your car if the fair market value of the car is over $5,000. This is an IRS requirement if you plan on deducting the car donation from your taxes. You will need to obtain the appraisal before you sign over the title to the church coordinator.
Be respectful and clean the car before you donate it. Donate it in the condition you would like to receive it if you were the recipient.
Always verify the organization you are donating your car to has tax exempt status under section 501(c)(3) of the Internal Revenue Code.
- Be respectful and clean the car before you donate it. Donate it in the condition you would like to receive it if you were the recipient.
- Always verify the organization you are donating your car to has tax exempt status under section 501(c)(3) of the Internal Revenue Code.
Alicia Bodine is a New Jersey-based writer specializing in finance. With more than 13 years of experience, her work has appeared in LendingTree, GoBankingRates, Sapling, Zacks and budgeting.thenest.com.