Donating a Car

General Tips

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

Find out as much information as you can about the nonprofit you've chosen, including the intended use of your vehicle, the percentage of the sale that goes to the stated cause, and the organization's tax-exempt status.

Unfortunately, scams are common in the process. To make matters worse, they can be hidden anywhere along the line, from within the charitable organization itself to the company re-selling your vehicle. Even the towing company could be involved.

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

While donating a vehicle could result in significant tax savings, the laws concerning vehicle donations are complicated. It's wise to check with the Internal Revenue Service on the matter, or download the agency's vehicle donations publication. You'll find valuable guidelines about determining a fair value for your vehicle, and the kinds of written documentation you'll need for proper recordkeeping.

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

For more information on this subject, be sure to read our article about Donating Your Car.

Donation Procedures

Be sure to assign the title over to the charitable organization.

Remember, the plates stay with you, so remove the license plates before relinquishing your vehicle. The plates may be transferred to another vehicle, or you can surrender them at a county clerk's office. Or, you can simply destroy them.

Don't forget to alert your vehicle insurance company that you no longer own the vehicle.