Donating a Car

Investigate First

While donating a vehicle to a charity may be a noble and possibly financially beneficial act, you should carefully investigate the matter first.

To begin, find out as much as you can about the charity you're thinking of using, including:

• What percentage of the sale goes to the organization

• What they intend to do with the vehicle

• Whether the charity qualifies as a tax-exempt organization

Unfortunately, scams are common in the vehicle donation field, and can be hidden within the charitable organization, the organization re-selling the vehicle, or even the towing company.

Resources

It's a good idea to check with the Better Business Bureau and the Arkansas Attorney General's office to see if the organization has a favorable track record and is registered with the state. The Attorney General's site is loaded with helpful consumer information about donations and charities.

Also refer to the IRS's Publication 78 to search for qualified charities.

Tax Savings

Donating a vehicle could result in a significant savings on your taxes. However, the tax laws concerning vehicle donations are complicated, so consult the Internal Revenue Service on the matter, or download the agency's A Donor's Guide to Vehicle Donations publication. Consulting an accountant or a tax professional would also be a smart move.