Trade, Sell, or Donate?
If the dealership lowballed your trade and you don’t want the hassle of selling your car, you might be wondering, “should I donate my car?” If you want the most value, the answer may be yes.
Get More Money from Donating Your Car
Haggling over trade-in value or trying to sell your car is often more hassle than it’s worth. It’s rare that you make enough from the sale to cover your time and expenses.
Donating your old vehicle to a 501(c)3 charity can lower your income tax obligation. This can put more money in your pocket if you get a refund or make your tax bill smaller if you usually end up owing money.
Donating Your Car is Easy
In many cases, all you’ll need to do is gather up all the sets of keys and the title. Several charities will even pick up your old car if it’s not running, but it’s a good idea to check with the charity first. You don’t want to get stuck towing it yourself. You’ll also want to make sure that the non-profit organization will handle the title transfer paperwork and save you a trip to the DMV.
Get the Most for Your Donation
It’s important to understand how a charity will value your vehicle donation. In most cases, the amount of your donation (and, therefore, the amount of your tax deduction) will be equal to the fair market value determined by the Internal Revenue Service.
If you want a bigger deduction, look for a charity that fixes and resells cars. The value of your car is determined by how much the charity gets from selling your old car, which is often substantially more than the IRS fair market value.
Make Sure Your Car Donation Benefits YOUR Community
Now that we’ve explained how donating your car can benefit your bottom line let’s think about how it can benefit your community.
Nationwide Orgs: Lots of Overhead, Pennies Spent Locally
When you type “donate my car” into a search engine, you’ll find a lot of nationwide charities at the top of the search results. And they sound like fantastic organizations: who doesn’t want to donate to veterans and kids? But the problem with these national charities is, they tend to have a lot of overhead, and very little of your donation gets back to your community.
An Example of Giving Back Locally
Located in the Twin Cities area in Minnesota, Newgate School offers vocational training in auto mechanics and auto body repair. The programs are offered free of charge to young adults in the area looking for a stable career.
Donated vehicles are used in Newgate’s mechanics and auto body education programs, where students get hands-on training. After these vehicles are repaired and detailed, they are either resold or donated to local working mothers through Newgate School’s Wheels for Women Program.
This is how your car donation makes a direct impact on real people in and around Anoka County, MN.
Your Donation Can Make a Big Difference Close to Home
Donating your car can put more money in your pocket compared to trying to trade or sell it. And when you choose a charity that helps the people in your community, your car’s value goes even farther.
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