Why do people donate a car?

[ronaldo]

Why do people donate a car?

[jIM_Ohio]

Tax Deduction

[maat55]

For charity, the tax right off or because they don't want it.

[MonkeyMama]

Because it's an easy way to get rid of a non-functioning or worthless car, also.

[disneysteve]

I never understood the tax deduction thing. Let's say my car is worth $1,000. I can sell it for $1,000 or I can donate it and save 25% of $1,000, or $250 from my taxes. Isn't it better to have the $1,000 cash?

[MonkeyMama]

I think it really has to come down to the hassle factor. A donation is just a phone call. To sell a car can take a lot of work.

Though I am sure plenty of people donate cars without thinking it through.

[jIM_Ohio]

I second that donating is less work.

You look up blue book value and can write it off
then donate and be done.

It's possible the car needs lots of work and the people you donate it to want the parts, not the car itself.

The two cars I have donated could barely run when I donated them. I could not in good conscience sell it, but will take the tax writeoff if the government allows it.

Fire departments needs cars like this to blow up and run drills on.

[rebeccae55]

For the same reason people donate money or other items to charity.

They want to support a good cause.

My parents always donate their old cars. Some charities simply sell cars to raise money for their operating expenses, but the charity my parents give theirs to fix up the cars and give them to low income folks trying to become self-sufficient. My dad is aware of a Sudanese refugee still driving a 1994 Camry that my dad donated in 2001! This charity does routine maintenance and repairs as well for the recipients of their vehicles.

[moneybags]

Originally Posted by disneysteve

I never understood the tax deduction thing. Let's say my car is worth $1,000. I can sell it for $1,000 or I can donate it and save 25% of $1,000, or $250 from my taxes. Isn't it better to have the $1,000 cash?

If you're going to donate $1,000 to a charity, it may be easier to just donate the car. It saves you the hassle of selling the car.

[disneysteve]

The convenience factor does make sense. If you want to give $1,000, easier to give up the car then to write a check. Saves you the hassle of selling the car.

[MiikeB]

Also the fact that you can write off the blue book value, when in reality you may not be able to sell it for anywhere near that in your particular area.

[disneysteve]

Originally Posted by MiikeB

Also the fact that you can write off the blue book value, when in reality you may not be able to sell it for anywhere near that in your particular area.

Didn't IRS change the rules a year or two ago to prevent people from claiming car values way higher than what the vehicles were actually worth?

Here it is, from the IRS website:
"Charities typically sell donated vehicles. If the vehicle is sold by the charitable organization, the deduction claimed by the donor usually may not exceed the gross proceeds from the sale."

So you can't claim blue book value if the charity sells the vehicle. You can only claim what they get when they sell it.

[MiikeB]

Originally Posted by disneysteve

Didn't IRS change the rules a year or two ago to prevent people from claiming car values way higher than what the vehicles were actually worth?

Here it is, from the IRS website:
"Charities typically sell donated vehicles. If the vehicle is sold by the charitable organization, the deduction claimed by the donor usually may not exceed the gross proceeds from the sale."

So you can't claim blue book value if the charity sells the vehicle. You can only claim what they get when they sell it.

I see.

I didn't realize they generally sold them. The only car donation charities I have experience with are the ones where you donate to the fire department as a test vehicle or to a place that will give it to someone who needs a car. There was never a sale so nothing but the blue book to really go by.

[myrdale]

I'd say because they like helping people.

As for the tax deducitions on a $1000 car vs selling it? I guess this might be considered lying and stealing in a way, but it would be nice if they could appraise it a little over market value. My example would be when I donated 4 shirts last month to the Salvation Army, the girl there was in a good mood and put me down for 10. I never asked her to do that, she just did it I guess to help me for helping them. I've never donated a car before, but I would imagine they have to be strict to their rules.

[safari]

Originally Posted by disneysteve

Didn't IRS change the rules a year or two ago to prevent people from claiming car values way higher than what the vehicles were actually worth?

Here it is, from the IRS website:
"Charities typically sell donated vehicles. If the vehicle is sold by the charitable organization, the deduction claimed by the donor usually may not exceed the gross proceeds from the sale."

So you can't claim blue book value if the charity sells the vehicle. You can only claim what they get when they sell it.

I just don't see how that's going to work. Does that mean I cannot claim a tax deduction until the charity sends me a letter saying how much they sold my car for? And what if they take a while to sell it or they don't sell the car at all? There are too many gray areas.

[MonkeyMama]

Originally Posted by safari

I just don't see how that's going to work. Does that mean I cannot claim a tax deduction until the charity sends me a letter saying how much they sold my car for? And what if they take a while to sell it or they don't sell the car at all? There are too many gray areas.

Yes, you get a tax reporting (like a 1099).

It's actually not very grey. IT's all spelled out pretty clearly (as opposed to much murky tax law). Don't remember it all off the top of my head, but I believe you can claim blue book if they don't sell it (some charities keep the car). But the ones that sell it, sell it quickly and send you a form. They rather have the cash than your car, so they don't hang on to them for long. But there is plenty of clarification for the charities who keep the cars or donate them to the needy.

The charities keep on top of it. They need to stay on top of all that to make it easy on the donors.

[noppenbd]

Originally Posted by safari

I just don't see how that's going to work. Does that mean I cannot claim a tax deduction until the charity sends me a letter saying how much they sold my car for? And what if they take a while to sell it or they don't sell the car at all? There are too many gray areas.

We donated a car a little while ago to a charity and it was one of the smoothest transactions I've every done related to a vehicle. The KBB value was only $300 so it was not worth it to try and sell IMO. The towing co hired by the charity called, scheduled a time to pick up the car, and came and picked it up. We got a letter about 2 weeks later with the sale price ($1000!). So we ended up getting a $250 tax deduction with no work whatsoever, plus felt really good about our charity getting the money.

[feh]

We've donated one car. We did it for a combination of reasons already mentioned: tax deduction and helping others.

That was before the IRS changed the rules, however. We were able to deduct the blue book value, which was much more than we would've been able to sell the car for. Can't do that any longer.

[Coleroo]

I would say there are many people who do it for the sheer convenience of it. I know I would! To me, selling a car seems like so much of a hassle...I've tried it before and really don't like it. Sometimes a thousand bucks or so is simply not worth the hassle it would take to get it advertised and sold, so the convenience of having someone just come and haul it off - while getting an easy tax break for it - is very tempting.

Especially when it's an older car, if you put it in the classifieds most folks try to talk you way down on your price or want a "perfect" car (what do they expect for 500 or 1000 bucks???). My dad's even sold a car where the person never even returned to pick it up (AFTER they'd paid money!)..but that's a whole other subject..haha