How to Donate Your Car to Charity

Three Methods:Deciding if Donating the Car is Right for YouChoosing a CharityCompleting the Donation

Thousands of people donate cars to charity each year. These contributions are an important source of income for charities around the country. Of course, you can donate a car to any charity that accepts them, and if you don’t care about deducting the value of your car from your taxes, that’s all you have to do. However, the IRS allows individuals to deduct the value of their charitable donations from their income, including cars donated to charities. There are several conditions which apply, but they are easy enough for any donor to learn.

Method 1
Deciding if Donating the Car is Right for You

  1. 1
    Calculate your tax bracket. The amount you will save as a result of your deduction depends on your income tax bracket. Before you make a donation, you should determine what tax bracket you fall into.[1]
  2. 2
    Estimate the fair market value. The IRS only allows you to deduct the fair market value of the donated car. Since most charities will sell the donated car, you won’t know the actual market value until the charity sells it. However, before you make the decision to donate, get a good estimate of value beforehand.[2]
    • There are many car valuation services you can use. Kelley Blue Book and Edmunds are two of the oldest and most reputable, and they have calculators on their websites.
    • When you estimate the value, the estimate must be for the same make, model, year, condition, and accessories package as the car you donate.
  3. Image titled Donate Your Car to Charity Step 3
    Compare the estimated deduction to the standard deduction. In 2016, the standard deduction for a single person paying taxes in the US is $6,300, $9,300 for the head of household, and $12,600 for married couples. If you don’t itemize, you can deduct this amount automatically. In order to make itemizing deductions worth it, your total deductions need to exceed this amount. [3]
    • Therefore, the fair market value of your car, coupled with your other itemized deductions, must exceed the standard deduction in order to see any financial benefit from the donation.

Method 2
Choosing a Charity

  1. 1
    Choose a qualifying charity. Not all charitable contributions are tax deductible—the donation has to go to a qualifying charity or nonprofit. Usually, 501(c)3 charities and religious organizations will qualify.
  2. 2
    Make sure the charity accepts cars as donations. Not all charities accept cars as donations, so be sure to check before you drop your car off. If you can't find a charity you'd like to donate your car to, Car Angel uses car donations to fund a variety of projects, including literacy, children's welfare, and prison outreach. Learn more at
  3. 3
    Beware of scams. Although the IRS' listing of exempt organizations should be all you need to find a reputable charity, if you still have doubts, then ask to see the organization's 501 (c) 3 certification from the IRS, and their articles of incorporation and bylaws specifying that they accept cars as donations.[5]

Method 3
Completing the Donation

  1. 1
    Wait for the charity to sell the car. The charity has to sell the car in order for you to claim the donation. Once the car is sold, the charity will give you a receipt, called Form 1098-C. Most charities will do one of three things to sell the car: [6]
    • Send the car to a salvage yard, or junk yard. This will result in the smallest deduction for you.
    • Sell the car at auction. A car at auction usually won’t fetch as high of a sale price as a sale to an individual, but it will probably be more than what a salvage yard pays.
    • Sell the car conventionally, which is rare. Usually this will result in the highest sale price.
  2. Image titled Donate Your Car to Charity Step 4
    Deduct the actual fair market value. You can only deduct what the car sells for—the amount on 1098-C—which usually won’t be quite as much as the full market value (Blue Book value). However, under the following circumstances, you can deduct the full market value:[7]
    • If the car is sold for less than $500, you can deduct $500.
    • If the car is used by the charity, then you can deduct the full market value.
    • If the car is donated directly to an individual, you can deduct the full market value.
    • If the charity makes a “material improvement” to your car, like rebuilding the transmission or painting the car, you can deduct the full market value.
  3. 3
    Fill out the proper paperwork. If the value of the donation is more than $500, you’ll have to fill out Form 8283, Section A. Once you fill it out, it will be filed with your tax return. If the car is worth more then $5,000, then you’ll have to fill out Form 8283, Sections A and B. In addition, you need to include the Blue Book value of the car, records of any improvements, and pictures of the car.[8]
  4. 4
    Consider an alternative. If you don’t think the charity will be able to sell it for the same price you could sell it for, consider selling it yourself and then donating the proceeds to the charity. That way both the charity and you get the maximum value out of your donation. [9]

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Categories: Fundraising and Charity