Car Donation vs. Cash for Junk Cars

Most of us have been there: We have a “junk car" we can't, don't, or won't drive anymore, but we're not sure what to do with it.

Rather than trying to pawn your car off on someone else for what little amount of “blue book" value it might have, consider the pros and cons of charity car donation vs. getting cash for your car.

Car Donation

Pros of Car Donation

When you donate a car to charity, you can:

  • Make a charitable contribution to your community, or a community in need.
  • Often take advantage of tax deductions.
    • Generally, the charity must have a 501(c)(3) status or be a religious organization in order for you to make a tax-deductible car donation. Ask the charity to see such documentation, or use the Internal Revenue Service's (IRS) EO Select Check to determine whether the charity has a 501(c)(3) status. Always work with a tax professional when it's time to file your tax deductions.
  • Find ways to make use of those “other vehicles" just collecting dust such as motorcycles, boats, and other recreational vehicles.
  • Usually have the vehicle picked up for free.
    • This depends on the charity you choose.

Cons of Car Donation

As wonderful as charitable contributions feel, there are some downsides to making a car donation vs. getting cash for cars.

For example, when you donate a car, you could:

  • Fall prey to car donation scams, which often take away a good part of the money meant to help the charity (if the charity even exists).
    • Learn more in our section on Car Donation Scams.
  • Walk away without cash in hand.
    • Aside from tax deductions, there is no financial incentive for donating a car to charity.

Cash for Junk Cars

Pros of Getting Cash for Your Car

If you're skeptical about car donation, maybe getting cash for your car is the better option.

Some pros to choosing cash for junk cars include:

  • You get cash!
    • Whether you choose a formal “cash for cars" program or sell your car to a junkyard, you get money in your pocket.
    • Sometimes, this cash acts as an incentive to purchase a newer, more fuel-efficient vehicle.
  • Generally, you help get emissions-polluting vehicles off the highway.
    • Most cash for junk cars programs or junkyards don't put these vehicles back on the roads.
  • Possibly having the vehicle picked up for free.
    • This depends on the program or junkyard you choose.

Cons of Cash for a Junk Car

However, taking the cash for junk cars route isn't best for everyone.

For example, getting cash for cars:

  • Gives up your tax deduction option.
    • You can't make a tax deduction on a vehicle you sell like you can when donating cars to charity; in fact, it might add to your income reporting requirements. Speak with your tax professional before making a decision.
  • Means you have to find a way to transport your junk vehicle.
    • Again, this depends on the program or junkyard, but if neither offers a free pick-up program and your junk car doesn't run, you face towing responsibilities.
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