Car Donation FAQ - Vehicles for Change

The easiest way to dispose of an old car is to donate it - and it can possibly be the best financial decision, depending on where you donate your car. Selecting the nonprofit that works for you is key, so consider the following before making your selection.

Donated Vehicles

IMAG1168My car is in very poor condition. Can I still donate it?

  • Not all organizations accept vehicles in poor condition, so check with the organization before you donate. Several nonprofits, such as Vehicles for Change, will tow your vehicle, so they will accept your car donation even if it doesn’t run. If your vehicle is 4WD or AWD, be sure to give that detail to the nonprofit, as it changes how the vehicle is towed.  

Am I donating directly to the nonprofit or a for-profit middleman?

  • This depends on the organization. There are nonprofits such as Vehicles for Change that provide a direct donation service. Others, such as Car Donation Wizard, are for-profit organizations that handle the processing of donated vehicles on behalf of nonprofits.

What will the nonprofit do with my car?

Different nonprofits dispose of vehicles in various ways. Here are the ways that your donated vehicle may be used:

  • Provide the car to a family in need. There are some organizations, such as Vehicles for Change and Good News Garage, that provide donated cars to families with financial challenges so that they have reliable transportation.
  • Sell the car at auction. Most nonprofits sell cars at auction because it is the easiest way to dispose of a vehicle – this way the organization does not have to put funds into repairing a vehicle, nor do they need to obtain a dealer’s license.
  • Sell the cars on their own retail lot. If the nonprofit has a dealer’s license, they may choose to resell the vehicle themselves. There are only two organizations in the region that are capable of this, including Vehicles for Change.
  • Use the car to further their mission. Some charities use donated vehicles to help them achieve their mission. For example, a homeless shelter that receives a donated vehicle may use that car to pick up food supplies.  

Tax Deductions

Is my car donation tax deductible?

  • If your donation is a qualified 501 c3 organization, it is tax deductible.  The value of your deduction depends on what the charitable organization does with the donated vehicle.

What is my tax deduction?

Your tax deduction depends on what the charitable organization does with the vehicle. If your car is:

  • Provided to a family in need. If your vehicle is provided to a low-income family at a significantly reduced cost, you will be able to deduct the maximum amount possible by IRS regulations, the fair market value of the vehicle.
  • Used to further the organization’s mission. You can deduct the maximum amount possible, the fair market value of the vehicle. 
  • Sold on the organization’s retail lot. Your deduction would be the selling price of the vehicle.
  • Sold at auction. Your deduction would be the selling price of the vehicle.  

What is the maximum tax deduction?

  • Many car donations advertisements state they will provide the maximum tax deduction, The maximum tax deduction is typically the fair market value of the vehicle, which is only obtainable if the vehicle was sold to a low-income family at a significantly reduced cost or if the vehicle was used to further the nonprofit’s mission. There are many resources that can help you determine the fair market value while explaining the process, such as and

What documents should I receive from the organization?

  • If your donation was valued at more than $500, you are entitled to a written acknowledgment of the donation. The acknowledgment must contain:
    • The donor’s name and taxpayer identification number
    • The vehicle identification number of the donated car
    • The date of the contribution, and one of the following:
      • A statement that no goods or services were provided by the charity in exchange for the donation
      • A description and estimate of the value of goods or services that the charity provided in return for the donation

Preparing for Donation

What do I do with my tags?

  • Tags need to be removed from the vehicle - prior to the tow company picking up the vehicle - and returned to the Department of Motor Vehicles. Once the tags are returned, you should cancel your insurance on the donated vehicle.

What do I need when the towing truck arrives?

  • You will need the title of your car, lien release (if applicable) and keys. Also, be sure to remove tags and personal belongings from your car.


This information is provided by Vehicles for Change, a nonprofit organization that repairs donated vehicles and awards them to low-income families so they can get to work.