Individuals planning to donate their car can either donate it directly to a charity or an individual or sell it and donate the proceeds to a charity. One can also donate one’s car to a local school, hospital, or non-profit organization. Some car dealers also accept car donations. Automobile shops accept car donations for educational purposes to teach students about maintenance and repairs. Read on to learn more about car donation.

Know how charities use car donation

Charities use cars they receive as a donation for professional purposes or sell the car for a discounted price to an individual, or put the car for auction. If the car is in working condition but needs repairs, the charity makes some repairs and sells the car. If it is a junk car, they sell it for scraps and use the proceeds for charity.

Research the charity

Verify the credentials of a charity before donating to avoid any scams or frauds. List a few charities you know or prefer. Proper research helps ensure that your contribution is utilized for good ends. You can contact your state’s charity regulators to verify if the organization is genuine. Check if they have a 501(c) 3 using an IRS Tax Exempt Organization Search Tool.

Evaluate the charity

Look for charities that are non-discriminatory and spend more on programs than administration. You can check with these watchdog organizations and websites that rate and evaluate charities-

• American Institute of Philanthropy
• Charity Navigator
• Better Business Bureau Wise Giving Alliance
• CharityWatch
• GuideStar

Prepare for a tax deduction

As per IRS, tax deductions are calculated based on how the charities use your donation. For example, if the charity uses the car for its use, sells it for less than $500, or donates it to a needy person, you can either deduct $500 or the fair market price, whichever is less. Find out the car’s selling price from the charity to know your deduction. Use a used-car price guide to determine the car’s fair market value.

Gather the required documentation

Be ready with the following documentation to make your donation-

• Title document
• Title transfer form
• Accident history (if any)
• Lien release form in case you have an existing auto loan.

Conduct the transfer in the presence of a notary. Once the donation is complete, notify the insurance company and cancel the insurance.

Do basic repairs and check up

Before donating the car, check the condition of the lights, wipers, brakes, and tires and do any necessary repairs. Clean the car well, remove personal belongings, and assemble all the keys before handing them over.

Make the donation

If you donate to an auto dealer or a charity, fill out the forms carefully, as DMV may decline forms with errors. If you are donating your car online, double-check the information, choose the pick-up time and be ready when the agent comes to pick up the car.

Transfer the title of the car correctly

Sign the car title directly to the charity’s name. Do not leave the buyer section blank; if the charity or their agent insists on leaving it blank, do not go ahead with the donation. If misused, the donor may remain liable for the vehicle. Get the receipt from the charity, including names, date of donation, recorded donation amount, and the charity’s 501 (c) status.