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]

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]

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]

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]

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.