Donate Auto For Charity Versus Tax Break

You might have come across such ads where the slogan chanted repeatedly is “Donate auto and enjoy a tax break”. Well, this is true technically. Attributing to this reason, past few years have witnessed an increase in the number of auto donation which is a two way process i.e. it not only helps the donor but also others for whom the used vehicle is donated.

Charity Or Business?

Although charity remains the prime motive of car donation, yet gauging its pros and cons, it has become more or less a massive business. In 2000 alone, almost three-fourth people of a million, opted for car donation and considerably decreased their taxes by nearly $650 million. With the expansion of car donation industry in America and elsewhere, donors find it easy to donate auto and in return reduce their tax return.

Tax Shelter

In the United States, critics are of the opinion that auto donation is in reality an alternate for tax shelter. However, at the same time reliance of nonprofit organizations on revenue generation from car donation has been immense.

Tax Considerations

Advertised as an easy option to dispose off used car and come under the umbrella of tax shelter, there are certain pre and post donation considerations that a donor needs to fulfill so that he can qualify for a significant tax deduction. Apart from following state rules for cancellation of plates etc, post donation requirements include getting a written acknowledgement from the charity pertaining to the sale of the car along with itemized tax deduction.

Benefit To Charities

Many charities worldwide run donate auto programs. Few of them sell donated cars themselves while others carry out the process with the help of auction companies. Similarly, there are companies that collect and sell the vehicle for its donor and distribute the money to charities, the donor has opted for.

Car Donation, A Noble Cause

Charity can be in any form or shape; hence auto donation can change someone’s life, who is in need in any part of the world. It is that time of the year, when people dispose off their non-usable items, hence if those are utilized for helping any needy, their purpose will be served far better than simply throwing them away.


Top Tips To Donate Auto

A lot of people in America have benefited from donate auto option, getting a tax reduction as a result. The following guidelines will help you donate your vehicle in a beneficial way:

1.      Avoid the Intermediaries

It is sensible to avoid the intermediary companies that promise to handle your car donation. These organizations keep a good chunk of the money, almost 50% of your vehicle’s value for themselves. Look for a charity or an NGO that handle the donate auto process, themselves. This way they get to keep the entire profit for charity only. Nowadays, regular charities give you the donate auto option and it is advisable that you check with them before making a deal with the intermediaries.

2.      Look for the Donate Auto Charity

Look for a non-profit organization that specifically helps you donate auto, if your regular charity doesn’t have the option. A little research on your part will give you a better outcome, and it is important to put a little time and effort into this. Since you’re trying to help the needy, do it in a way that benefits them fully.

3.      Drive to the NGO

Usually a lot of companies advertise free towing and pick up for your automobile. If your vehicle is in working condition, it’s better to drive it to the final stop yourself. This way you’ll save cost..

4.      Make Sure Your Vehicle is Properly Transferred

Do the paperwork carefully. Sometimes the NGOs tell you not to fill the transfer of ownership space on the form. If you leave that blank, according to law, the car would still be yours and it can be sold to a third party. Moreover, in case of road accidents, criminal acts or parking tickets, the entire responsibility will still be on you.

Last but not the least, take time to donate auto sensibly, and make the most of it for yourself and the charity.