DONATING YOUR CAR: Myths and Facts

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Having a car that has fallen into disuse over the years is common for many middle-class families. Perhaps the car is no longer in style. Maybe it belonged to a child who no longer needs the vehicle. The car could need a few repairs you haven't gotten around to, or perhaps you simply don't need it anymore. What do you do with this unwanted vehicle?

Car donation is an option considered by many families and individuals. An unused vehicle presents an opportunity to do good for your community. However, there are plenty of myths surrounding car donation. If you want to know the truth about donating your car, read on.

Myth: All Charities Sell Your Donated Car

If you've been doing any research into what is required for donating a car, chances are you've discovered many charities accept car donations. Even charities that seem to have nothing to do with cars will accept a donated vehicle – but why? After a bit more investigation, however, it becomes clear these charities intend to sell your donated car at auction for profit.

There's nothing wrong with that in principle. After all, if there's one thing charities need, it's money. The revenue from donated cars goes to administrative costs, salaries, and projects support the charity’s mission. This is the most common way a donated car is used. 99% of charities sell all the cars they receive as donations.

However, it's a myth that all charities handle cars this way. Cars in good condition can provide more than financial value. Vehicles for Change recognizes this. The organization formed around another potential use of donated cars: giving them to families in need.

Many lower-income families suffer because they don't have cars. Tasks like going to the grocery store may seem simple to people with vehicle access, but they can become incredibly difficult for those without reliable transportation. Even getting to the doctor when a family member is sick can be nearly impossible. For families already struggling with money, not having a car adds an even greater burden.

Even in areas where public transportation is reliable, making simple trips can become an all-day affair. Most breadwinners in lower-income families work long hours for low pay. This leaves them tired and with little time to run errands. With the added obstacle of not having a vehicle, tasks like going to the grocery store can become impossible.

Vehicles for Change sells cars to needy families for a reduced price, typically less than $1000. This allows families to help themselves by giving them access to better jobs as well as the ability to perform the tasks necessary to keep a family afloat.

Myth: Donating Your Car Loses You Money

Federal regulations around donating your car have changed recently. As a result, there is a lot of misinformation saying that car donation is a financially poor choice. Let's look at the facts.

Most of the limitations on tax breaks have to do with car donation to charities that plan to sell your car for parts or at the auction. In this case, it's true that donating a car can mean you take a hit financially. However, when you donate your car to Vehicles for Change, the car may be repaired and then awarded to a family in need. In this case, you stand to gain extensive financial benefits, depending on the type and condition of your vehicle.

If the car you donate can be fixed up for under $1000 to provide at least 2 years of reliable service (with reasonable maintenance), you can deduct the car's fair market value from your taxes. In most cases, these cars  are 10-12 years old or less with fewer than 150,000 miles on them. Clearly, in this case, donating your car doesn't lead to a financial loss. In fact, it's one of the most monetarily beneficial ways for you to get rid of your unwanted vehicle.

Vehicles for Change accepts cars in a variety of conditions. For cars that need more extensive repairs but are basically in good condition, the organization's technicians perform the necessary repairs and then sell the vehicles through Freedom Wheels, a non-profit car lot operated by Vehicles for Change. In this case, the donor can deduct the fair market price of the vehicle minus the estimated cost of repairs Vehicles for Change will provide.

Luxury cars are also sold through Freedom Wheels, as the upkeep required for a luxury vehicle to stay on the road often isn’t practical for most lower-income families. In this case, you as the donor can deduct the retail selling price of the car from your taxes, which is typically equal to the car's fair market value.

If you have a car in bad condition that would require expensive repairs, car donation can still be financially beneficial. These cars are auctioned off to one of Vehicles for Change's partners, and the donor may deduct the selling price of the car. This is usually 1/3 to ½ of the car's fair market value. Therefore, car donation can be one of the most financially sound ways to say good bye to your old vehicle, and it has the added bonus of helping those in need.

Myth: Donating a Car is Difficult recipient image-01.png

Donating your car to Vehicles for Change is quite simple. The first step is to fill out a form online. This form requires basic information and takes about 10 minutes to complete. Depending on your preference, you can finish the form online or print it to fill out by hand – you can then email, fax, or mail the completed form to Vehicles for Change.

The form first asks for your personal information. This information is always kept strictly confidential. Your name, birth date, street address, and social security number are requested. Then, you must fill out the location of the car if it's different from your street address. Finally, a description of the vehicle – including make, model, year, and the car's general condition – is needed.

After submitting this form, Vehicles for Change will contact you to set up a time to pick up the vehicle. Then you will receive a tax receipt in the mail, so you can redeem the tax benefits.

The process for donating your car is simple.

Myth: Most Cars Can't be Donated

Different charities have different guidelines on what kinds of vehicles they accept for donation. Vehicles for change accepts almost all kinds of cars in the Maryland, Virginia, and Washington, D.C., area. If your car is located in another part of the country, this doesn't exempt it. Vehicles for Change sends tow trucks all over to pick up donated cars. Cars, SUVs, and trucks are all accepted.

Even a car that no longer runs can be donated to Vehicles for Change; it will just be sold for auction. The proceeds from these auctioned vehicles, as well as from vehicles sold to Freedom Wheels, go toward repairing more cars for low-income families. Motorcycles, boats, and RVs are considered on a case-by-case basis.

If you have questions about your eligibility for donating your car, contact Vehicles for Change today.

Myth: Donating a Car Requires Many Documents

Minimal documentation is necessary when donating your car, but different states have different documentation requirements for car donation. In the majority of cases, especially in the Maryland area, all that's required for donating your car is the vehicle's title. To obtain your car's title, contact your local DMV with your VIN and title number. This information can be found on your car's registration, and the process for title acquisition can often be done online. Preparing the title for donation is equally simple. Print and sign your name under “seller.” Make sure you print your name how it appears on the vehicle's title. If there are two people listed on the title, both must sign.

Under “buyer”, list Vehicles for Change. Be sure to make a copy of the title for your personal records.

Sometimes, a lien release is required. This is only necessary if there was financing involved in your purchase of the vehicle. To obtain this, contact the lending institution for confirmation the car has been completely paid off.

Myth: Nobody Really Benefits from a Donated Car

Donating a car to Vehicles for Change is of great benefit to yourself, lower-income families, and your community. By donating to Vehicles for Change, you stand to benefit greatly from tax breaks. Vehicles for Change is the only organization in Maryland, Virginia, Washington, D.C. and Detroit that donates cars to families in need. This makes it the only organization in the area to offer these kinds of tax benefits to donors.

Lower-income families suffer as a result of not having access to cars, and a donated car can truly change the lives of those in need. Running simple errands becomes an enormous project when you must rely on public transportation, which in most areas of the United States is not very dependable, or perhaps even non-existent. Even where it is reliable, it takes a long time. Time is a commodity lower-income people often don't have, since many spend long hours at work or faced with a long commute. When families live in more rural and suburban areas, parents have limited options without a well running vehicle.

Myth: Donated Cars Don't Help Communities

Communities are made up of families, and helping a community starts in these families' homes. By donating your car, you make a tangible change in the lives of needy families. Donated food and money can save lives; however, for families who would be able to feed themselves were it not for transportation limitations, a donated car means freedom. Donated cars allow independence and a chance to better their own lives to those community members in need.

Myth: Lower-Income Families Don't Need Cars

When most people think of donating to charity to help the poor, they think of donating food, money, and clothing. These kinds of donations are absolutely necessary and life-changing. Consider, however, the difference a donated car can make. Many families are stuck in poverty simply because a lack of reliable transportation makes them unable to access better job opportunities.

Vehicles for Change has awarded more than 6,300 cars since 1999. 75% of the recipients of these vehicles reported missing significantly fewer days of work as a result of these cars. What's more, 75% got better jobs or increased earnings within the first year, for an average yearly increase of $7,000.

This impact is massively important for lower-income families. By allowing members of these families the opportunities they are qualified for, donated vehicles can mean independence, advancement, dignity, and self-sufficiency.

Consider donating your car to Vehicles for Change. Your generosity could make a difference in the lives of families in need.