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Buying a New Car and Wanting to Donate Your Old One? Some Tips to Help You Get Started

17 January 2017 by Meghan Carter

If you are purchasing a new car and would like to donate your old car instead of selling it, this is good for you to do. If you have never donated a car, however, you may be having a hard time understanding how to do so. If so, below is some information to help you get started so you can get your car donation in the right hands.

Find a Charity

The first thing you have to do is find a charity you can donate your car to. To find one of these charities, simply do a search online to find a charity in your area. Once you find one, do some research to make sure it is legitimate. The charity will come to your home and pick up your car at no cost to you. If the car is not drivable, they will send a tow to your home, and you will not have to pay the tow-truck driver.

Once you find a charity, you have to make an appointment with the charity to give them the title to the car, and you will have to fill out some paperwork.

Get a Car-Donation Tax Deduction

You can simply hand over your car and then be done with it. If you would like to use this donation as a tax deduction, then you must follow some rules the IRS has set. If you do not follow these rules, then you could not use this as a tax deduction, and that would make you lose money. The charity can also have benefits for taxes, such as if the charity uses the car to take meals to the needy, as would happen with Meals on Wheels, or if the charity donates or sells the car to a needy organization.

Some charities will sell the car at an auction to make money for their organization. If they do this, then you will have a limit to the tax deduction from the proceeds the charity gets from the car. For example, if the car's estimated value is $1,500 and the charity sells it for $400, then your deduction could not be over $400. For this reason, make sure you ask the charity what they are planning to do with the car before you donate it.

Contact the IRS if you have any questions about donating your car if you plan to use it for a tax deduction. This will ensure you get the greatest amount of money as you can from the car.

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