Donating a Car

General Vehicle Donation Tips

Donating a vehicle to a charity is a noble and financially rewarding gesture, but potential donors should be sure to do their homework first.

To begin, find out as much information as you can about the organization you're intending 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

Donor Beware

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

Check Out the Charity

Considering this, it's a smart move to check with the Better Business Bureau, the South Carolina 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.

The IRS also offers Publication 78, which lists approved charities. Remember that religious organizations count, but aren't listed. If you have questions, call the IRS at 1-877-829-5500.

Taking a Tax Break

While donating a vehicle could result in a significant savings on your taxes, the tax laws concerning vehicle donations are complicated. So, it's wise to check with the Internal Revenue Service on the matter. Also take a gander at the agency's vehicle donations publication.

If you're still in the dark about how to proceed, consulting with an accountant or a tax professional is also a good idea.

Donation Process

Assign the title over to the charity.

Remember, when you sell or donate a vehicle, remove the plates before handing the vehicle over to the charity. You may then transfer the plates to another vehicle of yours, or return them for cancellation to the Department of Motor Vehicles (DMV). Donors may also be eligible for a refund of their registration fees.

Also, complete a bill of sale, available from any DMV office location, and return it to the DMV.

Remember the Insurance Company

Let your vehicle insurance company know about the change of ownership.