How To Donate Your Car – Step-by-Step

Car donation can be defined as the act or the practice of giving away a vehicle that is no longer wanted (needed) or other vehicles to a charitable organization of choice.

It is only advantageous if the car can still be used by the charity organization after donation. Every usable car you donate your car tax deduction will be positively affected. This away the donor is sure to get a substantial tax deduction for its donation.

The Internal Revenue Service popularly known as IRS will require you to calculate your donations in one of the following two ways. This solely depends on how the charity utilizes your donation. One way is that deductions for the cars sold by the charity after donation are limited to the sales price.

The second way is that deductions for cars used for any other purpose, apart from being sold are limited to the car’s fair market value.

Here Are Some Reasons To Donate Your Car

Assistance to good charity organizations

You may decide to give up your car to aid in the work of charity organizations whose work you believe in. This might be because they are making a positive difference in the community you live in. • Tax write-off
Donating a car to a charity can result in huge tax savings if the donor includes it in his/her charitable contribution donation. For each usable car you donate your car tax deduction becomes significant.

Hassles of selling the car yourself

Donating your car will lift the burden of having to pay for newspaper advertisements, making phone calls, writing emails, showing your car to potential buyers that wish to view it or even haggling over prices with interested buyers.

Free pick-up

Once you decide to donate a car to a charity organization of your choosing, the organization will organize for the collection and transportation of the car to their premises at their own expense. However, some charity organizations deduct transportation fees such as towing charges from the car’s value. This directly translates in a reduction of your tax deduction.

Disposing of a car that does not have a proper title

If you have a car that you cannot find its title, donate it to a charity that will in turn sell it for parts or scrap metal. This will reduce the value of your tax deduction but will free you of the expense of having to replace the missing title or having it fill your driveway.

How car donations work:

i. Find out the charity’s car selling price
It is recommended that you use the price for which the charity sold your car as the amount for your tax deduction. In instances the charity sells the car at a discount price to a needy person or fails to sell it but instead prefers to use it, claim a deduction for the car’s fair market value.

ii. Establish the car’s fair market value
The IRS highly recommends that you use a reputable used-car guide to establish the car’s fair market value. The price search should be based on make, model and the overall vehicle condition. This can simply be done on the internet.

iii. Claiming the deduction
Report the established amount on line seventeen of Schedule A. The total eligible expenses on the mentioned schedule must be more than standard deduction amount for your billing status.

iv. Additional forms needed
You may need the following forms: Form 8283, Section A and Section B depending on your car donation deduction. A written appraisal is also a necessary documentation.


There you have it; car donation is a simple and beneficial process. For every usable car you donate your car tax deduction will be very much significant. Donate a car today and experience the joy of tax deductions.


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