A car seems like one of those things that never just happens to be lying around unused.
Surprisingly, though, there are thousands of people who donate their cars each year for exactly that reason.
Donation is both a popular and practical option for those looking to get rid of their car without too much work.
Starting to sound intriguing?
Follow along to answer: “What do I need to donate a car?”
How to find a good charity
You can start doing this by answering the following 3 questions:
1. Are they a nonprofit organization registered with the IRS?
2. Do they work hard to get the best sale, ensuring a higher deduction for you and more money for the charity?
3. Is everything processed in-house, or do they spend the bulk of their funds on outside call centers?
How to avoid bad charities
Unfortunately, the car donation industry is plagued with many fraudulent organizations.
This guide can help you sift through the bad organizations out there.
Do your best to ensure that your money is going to a good cause so that you can feel confident with your decision.
The information you need to donate your car before contacting a charity
Like Kars4Kids, most charities will have both call-in and online options.
After you choose your preferred method, we’ll take down some simple information about your car so the charity can properly evaluate it.
Year of your vehicle
This is defined by the tenth digit of your vehicle identification number.
Make and model
These are often indicated by badges or decals on the back of your vehicle.
If you’re having trouble determining what they are, you can find them listed on your vehicle registration certificate.
You can check your car’s mileage from your trip odometer.
Car running or not?
They’ll also want to know whether the vehicle is in running condition.
Do you have a title?
A title is a legal document establishing ownership of the car.
What documentation is needed to donate a car?
While Kars4Kids can arrange for a paperless process, you’re going to have to submit a title transfer.
We can usually pick up a vehicle without a title.
If we determine your car will have a higher resale value with the title, our title specialists will arrange for a new title on your behalf and pay for any fees along the way.
Release of liability
You’ll need to fill out and sign a release of liability, as well as remove your license plates.
What to do with the car title
- You’ll need to officially transfer ownership of the car.
- The charity will instruct you on how to fill out a report of sale and sign the transfer.
- Check out our titles page for state-by-state instructions.
Instructions for using our titles page
1. Select your state from the dropdown on the titles page:
2. Information about your state should appear below, like this:
3. If you click on “view sample” under “where to sign your title”, you will see an example of the title in your state and precisely where to sign it.
Like the California example below:
Things you should do before the donated car is picked up
What to do with the license plates?
You’re required by law to remove your plates.
If you aren’t transferring them to a different vehicle, then you must surrender them to the DMV.
Taking pictures of the car
The charity may ask you for a few pictures of the car to assist them in their evaluations.
This will also help you verify its value to the IRS, should this ever prove necessary.
Get your car ready - What you should do right before donating
You’ll want to remove any documents or personal belongings before handing over your car.
Try to clean out the interior to the best of your ability, so the charity doesn’t have to pick nickels off the floorboards or figure out what to do with the multiple car chargers they find.
Drop your car off or have the charity pick it up
While you may prefer to bring the car in yourself, many charities can arrange for free towing, scheduled at a time convenient to you.
Kars4Kids doesn’t even require you to be there when the car is picked up!
Just let the driver know when he calls to arrange pickup and leave your signed title in the glove compartment.
What to do about your taxes when donating a car?
Itemize your deduction
In order to be eligible for a tax deduction, your donation must be solely for charitable or public purposes, and you must itemize deductions on Schedule A of IRS Form 1040.
H&R Block offers a more detailed guide to itemizing versus taking the standard deduction. Speak to your accountant or tax advisor for advice specific to your circumstance.
Get your receipt
You should receive your tax-deductible receipt in the mail within 3-6 weeks of donating.
You’ll also receive a temporary receipt at the time of pickup.
File your tax forms
Your deduction can be claimed in the year that the donation was given.
If your car is sold for less than $500
If it sold for more than $500
Documents you should keep after the donation process is complete
The IRS requires you to retain the following information for your records:
- Name and address of charity
- Date of donation
- Place where you donated your vehicle
- Description of vehicle (year, make, and model)
- Written acknowledgment/legal receipt from charity (only when sold for more than $500)
And with that, you’re all set to donate your car, and finally get that driveway clear!
But before we let you head off, here’s one last pro tip for you: Read the IRS Donor Guide.
It’s always a good idea to educate yourself, and you can use the Donor Guide to check out the charity you’re donating to, confirm the value of your vehicle, and see what your responsibilities are as a donor.
We hope that you walk away understanding the best way to donate your car, the documents that you’ll need, what you need to be signed, and everything else that’s needed.