Donating a Car

General Vehicle Donations Tips

While donating a vehicle to a charity may be a noble and financially rewarding gesture, potential donors should be sure to do their homework first.

Find out as much information as you can about the organization you intend to use, including:

• The percentage of the sale that goes to the organization

• What they intend to do with the vehicle

• If the charity qualifies as a tax-exempt organization

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

It's a smart move to check with the Better Business Bureau, the Michigan Attorney General's office, or the Secretary of State's office to see if the organization has a favorable track record and is registered with the state.

Tax Benefits

The tax laws concerning vehicle donations are complicated. Check with the Internal Revenue Service on the matter, or download the agency's vehicle donations publication.

Consulting with an accountant or a tax professional is also a good idea.

Finding a Charity

Use the IRS's Publication 78 to search for qualified charities. Remember that churches and religious organizations aren't listed, but are eligible. Alternatively, call the IRS at 1-877-829-5500 to verify that the charity of your choice qualifies.

Donation Procedures

Keep a record of the sale, which can be a copy of the title, or a bill of sale containing all the pertinent information, along with the buyer's signature. This action frees the donor of any liability or infraction-related charges that might arise after the vehicle has been released.

Assign the title over to the charity. Don't forget to remove the plates, too. They can be used on another vehicle you may have, or simply destroyed.