4 Pros And Cons Of Donating A Car To A Charity!

4 Pros And Cons Of Donating A Car To A Charity

If you are here, you probably want to get yourself free of your unwanted car. But down the road lies a fork: the first way out is to sell your car, and the second to donate it. Though you do not need to struggle with this dilemma as this article deals in-depth with the pros and cons of donating a car. By the end, you will have a fair idea of how this works.

However, there are concrete pros and cons of donating a car, but the final answer to whether you should donate or not depends on your car’s condition. The final decision is a subjective matter, and you should consult your tax consultant or accountant for advice. So, let’s start!


Pros Of Donating A Car To Charity!


#1: Donate the car to help a needy

Donating a car is altruism at its core. So, the first and most important pro of donation has to be altruism-centric. Donating a vehicle brings positive changes in somebody’s life.

Also read: Tax Deduction On Donating a Car – Everything You Ought To Know

For example, somebody can now go to the office in a car instead of public transportation. Or they can drop their kids at school in a vehicle if the weather is rough. There is so much a car can accomplish for somebody in need. It opens horizons for so many new opportunities that they can now explore.


#2: Get rid of an unwanted vehicle and save money on repairs

Sometimes your car is not a very good deal. Selling such a vehicle can be a headache. It is possible that your car needs major repairs or is just old.

It is also possible that you have a collectible car. Such cars require expensive maintenance, or costly fuel or both.

In such cases, donating your car to charity is an excellent idea. This way, you can get a decent tax deduction without any headache of trying to sell it. Plus, you are helping somebody.

Many charities accept even the wrecked and junk cars. They take them to sell whatever is there in the car and help someone through the proceeds.

But even if your car is in an okay state but sits in your driveway. You can also consider donating it because it is of no use to you but can be for somebody. Plus, you will not need to pay taxes for it; instead, get a tax deduction. Definitely a great deal, isn’t it?


#3: Donate and earn tax deductions

This point is another crucial aspect of car donation. You can get tax deductions according to the selling price of your car. But bear in mind that not all charities will fetch you this opportunity.

Only charities identified by IRS will get you a tax deduction. So, do check the status of your chosen charity on the IRS website.


#4: No need to pay for towing and pickup

Lastly, another benefit of donation is that you do not need to pay for towing and pickup. Your chosen charity will do that for you and that too at your preferred time.

So, a car donation will not only give you some inner peace, but it is a peaceful process too. Well, almost because no deal is perfect. Everything has its cons. Le’s see the cons of donating a car to charity.


Cons of Donating A Car To Charity

#1: You will have to see to the paperwork

Donating a car has this one glitch: the paperwork. Just giving away the keys of your car won’t do. It would help if you had the proper paperwork to avail the tax benefit.

Also read: What is better: Donate or sell a car? [Complete Guide]

For example, you will need the car’s title and then transfer it to your chosen charity. Next, you will need to fill out all the required tax forms. And lastly, find out the fair market value of your car.

Many times your charity will help you with it. But still, you must take ownership of the paperwork. But the problem is, this paperwork can be intimidating for some. But trust us, it will be all worth it when you see the other guy benefiting from your car.

#2: No fast cash policy

It will help if you keep in mind that your car donation will not fetch you cash but a tax deduction. So, it is your choice whether you want money or a tax deduction. You can speak to your accountant or tax advisor to discuss which situation will be a winner for you.

#3: Choosing the right charity needs attention too

So, a word of caution will be that you cannot draw a tax deduction by donating your car to just any charity. The charity you are considering for donation must be non-profit and registered with IRS as a 501(c)3 charity.

If and only if your chosen charity is 501(c)3 identified, you can draw a tax deduction from it.

#4: Some states may levy income tax over the proceedings

This point is another reason why you may want to reconsider your decision to donate your car.

Some states levy additional taxes like income tax on the proceedings. So, it would be best if you consider talking to your tax advisor or accountant before you finalize your decision.



A last bit of advice we want to relay is that there are many hoax charities. So, be cautious not to fall into a trap. Some criminals take these ‘free’ cars and sell it as junk or at a second-hand car dealer. Some other scam organizations only give 5-10% of the proceedings to the charity. So beware of such people and organizations.

So, this was all in our guide about the pros and cons of donating a car. We hope you liked it and that it was informative. And if you have any questions regarding the topic, please drop them down in the comments section. We will reply ASAP.


The above text is written for informational purposes and is not intended as legal or tax advice.