Menu Join now Search

Instead of Selling Your Car, Consider Donating It

Walt Gillette, a fundraiser for a public radio station in Washington, D.C., knew all about donating vehicles to charity. After all, his employer, WAMU, promotes its donation program every day on the air and receives twelve to forty vehicles a week.

So when Gillette and his wife were ready to get rid of their 1987 Honda Accord a couple years back, they decided to donate it to the station. They didn’t want to deal with the hassles of selling a car, including strangers stopping by their home. The couple also didn’t want to trade the old car in at a dealership, figuring they would only get $300 or so.

So they donated it to WAMU. The radio station out-sources its car donation program to a third-party company called Charitable Auto Resources, which sent a tow driver to pick up the car. It had a cracked radiator and wasn’t drivable. The car eventually brought $700 at auction, a nice tax deduction for Gillette and his wife. The entire process, which ended when Gillette got a receipt to use for his taxes, took about two months.

Thinking about taking this route?

I asked executives at Charitable Auto Resources for tips for people considering donating their cars. Here are a few of their suggestions:

• Ask what measures the non-profit—or the company it contracts the car-donation program out to—takes to safeguard your private information, particularly your social security number.

• Find out how much of the proceeds from the sale of the car will actually go to the non-profit. The majority should be going to the non-profit. Charitable Auto Resources gives the non-profit 70 percent of the proceeds, after paying for the tow and auction fees.

• Get a tow receipt with the date and time of the donation, before anyone pulls off in your car. Otherwise, if that driver is in an accident and you can’t prove that you didn’t own the car at the time of the collision, you could be left with an insurance nightmare.

Donating vehicles (Gillette is quick to point out that WAMU accepts boats, RVs, motorcycles and WaveRunners, as well as cars) is hardly a new concept. The process has changed in recent years, due to a change in tax law. In the old days, donors could look up the fair market value of the car in the Kelley Blue Book or another reliable source, and then deduct that amount from their federal taxes. These days, the donor is generally restricted to the actual sale price of the car. The exception is if a charity keeps the car. For instance, a homeless shelter might need cars to transport people. If your car is used in such a way, you can deduct the so-called Blue Book value.

While this tax change may have made the process less appealing for some, Gillette and his wife would do it again. They had a positive experience. Not only did they get a tax benefit and a hassle-free experience, they got the bonus of providing the radio station with a nice chunk of change.