There are various ways of discarding an unwanted car. Some car owners prefer to sell on online platforms, while others place their ads in newspapers. However, others trade their cars with a dealer or simply store them in a garage.
But among all the methods, donating to charity offers many benefits, including saving time and unnecessary costs in negotiating transactions. In addition, car donation is an easy process that doesn’t require a lot of paperwork.
Here’s how car donation works and the top 9 reasons to donate a car to charity.
How Car Donation Works
Unlike what most people believe, donating a car to charity isn’t complicated. Essentially, the process involves contacting the preferred charity, arranging for collection, and obtaining a receipt for the transaction.
However, to ensure a safe and hassle-free process, the following steps come in handy:
- Identifying a good charity.
- Filling out the required forms, including transfer of ownership.
- Obtaining a receipt for the relevant tax deduction.
Reasons to Donate to Charity
Avoiding Expensive Repairs and Maintenance
It is possible to donate car to charity in any condition, even when it is non-operational. Most donation centers have volunteer mechanics that can restore the car to proper working condition and resell or donate it. So, it is worth donating when a car becomes a junk piece of metal that requires constant repairs or is inoperable.
Similarly, some car owners may have vehicles that require a higher budget for ongoing maintenance tasks, including oil and tire changes, licenses, and car insurance. In addition, some states require an annual permit for vehicle inspections and safety compliance. All these are extra costs that come with vehicle ownership, which car owners may sometimes not afford.
For this reason, car owners may donate to charity and buy low-cost alternatives that do not require frequent maintenance.
Obtaining Tax Deductions
The biggest perk for car donations to nonprofit organizations is the tax deduction.
Under the Federal tax laws, all organizations registered under clause 501(c) (3) are non-profit organizations that don’t pay taxes on their earnings. As a result, donations to such organizations do not attract any taxation from the Federal Tax Department.
Vehicle owners can therefore obtain tax waivers by donating to charity. However, to qualify for tax deduction when donating to charity, vehicle donors should obtain a tax receipt from the charity upon receiving the vehicle. The receipt shows the vehicle’s particulars and the total sales price for the car.
Supporting Community Projects
Charity organizations offer various services to improve the welfare of community members. Such services include maintaining roads, building schools, hospitals, and providing water. But they also depend on well-wishers’ donations to support various development projects.
When charity organizations receive car donations, they can refurbish and sell the vehicles for a profit. Therefore, donating a car is an opportunity for well-wishers to support community development initiatives.
The sale of a car is not instant but comes with its fair share of hassles. For instance, listing car sales ads in newspapers requires an advertising space at substantial cost. Similarly, phone calls, emails, and car exhibitions come in handy when selling through a dealer before making the actual sales.
On the contrary, donating to charity is relatively easy. Vehicle owners only need to contact the charity, verify the car’s ownership or availability, and specify an appropriate towing schedule. Then the charity will process the required paperwork, send the tax receipt to the owner, and collect the vehicle.
Free Pickup of Junk Cars
Unlike selling a car where the buying company tows the car at the seller’s cost, some charities offer free towing services. Free towing comes in handy if the car is deplorable so that the seller cannot drive it to the buyer’s yard. Even when towing isn’t free, sellers only incur a small deduction on the total sales received.
The Car Belongs to a Deceased Relative
Sometimes, a vehicle may be a donation or property inherited from a deceased friend or family member. The challenge comes when the vehicle’s title bears the name of the original owner and not the current user. If the car owner passes away, the current heir may not know how to change the paperwork to obtain a license.
Car donation centers have the expertise and knowledge to transfer ownership and change the title’s information. They help vehicle owners navigate the legal process and sell the car quickly when necessary.
Creating Space in the Garage
A major concern for most car owners is the massive storage space required for all the cars at the garage. The challenge is more pronounced if the garage or parking yard is only enough for a single car. As a result, keeping an inoperable car in the garage doesn’t pay off. Donating a car to charity helps get rid of the junk and create more room for a new one.
Having a Seasonal Car
Some car owners have seasonal vehicles only on the road for special occasions or seasons. Special vehicles include recreational cars, scooters, snowmobiles, sports cars, convertibles, and antique vehicles.
Whereas seasonal cars are trendy, they may sometimes lead to unnecessary expenses in routine maintenance and car insurance. Moreover, seasonal cars may sometimes require special storage or synthetic covers to shield them against outdoor seasonal variations.
Therefore, car owners will find an easy way out by donating seasonal cars to charity, which will sell for a decent profit.
Helping Others Own a Car
Saving enough cash to buy a car is sometimes a daunting task due to the hefty upfront payments required by car dealers. Besides, vehicle buyers must pay the required tax for car ownership when buying a vehicle.
But car donation removes the barriers to car ownership for prospective buyers. Some charity organizations give cars to deserving owners as a gift. However, they vet prospective owners to ensure they can meet the required costs of daily and routine maintenance. As a result, when car owners donate to charity, they make ownership convenient for those who can’t afford the upfront costs of buying a vehicle.