Donate it or sell it?

[billchrz]

I have a 2001 Dodge Durango SLT+ sitting on the street with a for sale sign on it. It has 132k miles on it, has been well maintained, and runs great (except for the AC not working). I've listed it on craigslist and other sites (not ebay motors yet) but haven't gotten any interest whatsoever. The price is cheap enough at $3500.

I could use any money that comes in right now as I'm still trying to pay off the last bit of debt that we have but the registration is up at the end of July and it will need to be inspected then as well. Not to mention that I'm still paying insurance on it.

My question is should I continue to wait it out or donate it? The new IRS donation rules make it difficult to really get anything as a tax writeoff unless you donate to a charity whose function is to give cars to needy families.

Thanks

[disneysteve]

I see no point (other than the altruistic thing) of donating a vehicle. A donation is only worth a fraction of the vehicle's value. If your vehicle is worth $3,500, donating it would only save you 25% of that off your taxes (depending on your tax bracket) so just $875. You'd be much better off cutting your asking price to below market value and selling it. If you really want to support a charity, give them a portion of the proceeds. So if you aren't getting any interest at $3,500, mark it down to $2,999 or less. Far better to get $2,500 from a sale than to save $875 in taxes from a donation.

[moneybags]

Originally Posted by disneysteve

A donation is only worth a fraction of the vehicle's value. If your vehicles worth $3,500, donating it would only save you 25% of that off your taxes (depending on your tax bracket) so just $875.

You only get the $3,500 if the charity uses your vehicle. If they resell it, which is typically what these charities do, you only get to deduct the price they sold it at. Usually the vehicles are sold for much less than the current value. You could end up with a $500 deduction on a vehicle you could have sold for $3,000.

[cschin4]

Could you sell it to a used car dealer? You may get half of that but could be better than nothing. And, I would try listing it locally for sale such as in local papers and trade magazines.
Or, if it runs great, why not just consider keeping it as well?

[noppenbd]

We donated a 1994 Geo Tracker which was booked at $300 or so. Someone ended up buying it at auction for $1000, so we got a nice tax break. This may be the exception to the rule, but maybe for very low valued vehicles it can work out in your advantage financially (plus you get to help out a cause that you believe in).

[disneysteve]

Originally Posted by noppenbd

We donated a 1994 Geo Tracker which was booked at $300 or so. Someone ended up buying it at auction for $1000, so we got a nice tax break.

So you got to claim a $1,000 deduction. That saved you about $250 or less on your taxes, so a little less than if you had actually found a buyer for $300.

[sounderella]

I probably would keep it. It always helps to have a paid off car just in case one of your other ones breaks or something. Could you change your insurance coverage to liabilty only to cut back on costs??

If you just have to get rid of it, I would see what Carmax would offer....but just remember, no one wants the SUVs anymore. We have an '03 Durango...it doesn't get the best mpg. It's almost paid for so there's no reason to get rid of it

[disneysteve]

Originally Posted by sounderella

It always helps to have a paid off car just in case one of your other ones breaks or something.

It's almost paid for so there's no reason to get rid of it

There is a cost of ownership for each vehicle that you have: insurance, registration, maintenance, etc. If one of our cars needs service, we get a loaner while it is getting worked on. Usually, the loaner is free, but even if I have to pay $30 for the day, it is cheaper than keeping a spare car around.