Get The VFC Tax Advantage
Vehicles for Change (VFC) car donors gain a tax advantage that you can’t get with most charities. To understand why you need to know that more than 99 percent of U.S. charities use donated cars for revenue only. They send vehicles directly to auction as is, sight unseen.
VFC is different. We are the country's premiere car donation and car award program, awarding donated vehicles to families in need. Because that’s our mission, IRS regulations allow many VFC donors to claim the full fair market value of their car—the maximum permitted by law. But this is just one way a VFC donor can maximize their tax deduction.
Our seasoned staff inspect each donation to determine how to derive the greatest value for VFC families while maximizing the donor’s tax deduction. Donated cars fall into four categories:
1. A vehicle we can recondition for less than $1,000 and will provide at least 24,000 miles or two years of reliable service.
Typically, these cars are less than 10-12 years old and have fewer than 150,000 miles, although some cars are outside of this range.
What we do: We repair and detail the car and award it to a qualified low-income family.
Deduction Value: Donors can deduct the vehicle's fair market value.
2. A car that needs a major repair (e.g. new transmission) but is otherwise in great condition.
What we do: We make major and minor repairs and detail the vehicle to maximize its value. Then, we sell it through Freedom Wheels, our retail used-car business. Proceeds allow us to prepare suitable vehicles for more families.
Deduction Value: Donors can deduct the car's fair market value, minus the estimated cost of the major repair. VFC provides these donors with the estimated cost of the repair.
3. A luxury car that’s in good condition.
Because they can be expensive to repair and maintain, VFC doesn’t provide luxury cars to low-income families. But if one is in good condition, these vehicles are sold through Freedom Wheels, our retail used-car business.
What we do: We repair and detail the vehicle in order to maximize its value. Then, we sell it through Freedom Wheels, our retail used-car business. All proceeds support VFC’s operations.
Deduction Value: Donors can deduct the selling price of the vehicle, an amount that is typically close or equal to the vehicle's fair market value.
4. A car that doesn’t meet our reliability standards and wouldn’t be cost-effective to improve.
What we do: This car is detailed and may receive minor repairs to maximize its value. One of several auction partners is selected to achieve the greatest selling price; in many cases, we assign a minimum bid to the car.
Deduction Value: Donors can deduct the selling price of their vehicle. It's important to note that auction houses are a unique market. In our experience, we find that vehicles at auction sell for anywhere from 1/3 - 1/2 of the fair market value of the car.
Please note: Deductions many vary depending on individual circumstances. Please consult your tax adviser and see the Internal Revenue Service’s “A Donor’s Guide to Vehicle Donations,” as well as their "Charitable Contributions," guide. Another helpful resource is the IRS’s “Determining the Value of Donated Property.”