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Tax Benefits and 6 Other Reasons to Donate Your Car to Charity

Car donation is probably the last thing on your mind when thinking of a way to get rid of your car. But you surely won’t regret it. By donating your vehicle, you not only support a charity of your choice. You also benefit from a tax deduction.

But how do you estimate the value of your donated car for your tax deduction? Aside from tax benefits, what are other reasons for donating your car to charity?

This article briefly explains how to determine your car’s fair market value (FMV). It also discusses how you can claim a deduction from your vehicle’s FMV.

The write-up also lists the other reasons for donating your car to a charity. It gives tips for determining whether a particular charity group is qualified to receive tax-deductible donations.

You may know someone who is seriously ill and is now in the advanced stage of mesothelioma. Think about that person when choosing a charity to support. You can visit a cancer organization’s website. Find out about its mission and know how your donation can help it.

Donating your car to a reputable charity can be a win-win for you. One organization that does this is cars2charities. Whatever condition it is in, Cars2Charities increases the value of the donated car. Increasing the value of the vehicles by over 25% to 50%, benefiting both the charities we support and the donors. Even if the vehicle is in terrible condition, they can still earn a substantial tax deduction. Read on to learn more about it.


The Tax Benefits of Donating Your Car to Charity

Donating your vehicle to a charity can lead to significant tax savings by deducting part or all your contributions on your tax returns.

But remember: Deductions are only applicable for contributions that serve a charitable purpose. So if you have a junker, you won’t get much of a tax deduction.

The selling price of your car determines the amount of your donation. Suppose your car sells for more than $500. If that’s the case, you can deduct its total selling price. But if your car sells for $500 or less, you can subtract the FMV of your donated vehicle up to $500.

FMV, or fair market value, is the price a willing seller would accept and a willing buyer would pay for the vehicle.

If you don’t know how to determine your car’s fair market value, check out online vehicle pricing guides like Kelley Blue Book and Consumer Reports.

When using a vehicle pricing guide, the sales price listed must be for a car with the same make, year, and model. The vehicle is also sold in the

same condition or with substantially similar accessories or options as your car.

Lastly, the FMV of your car shouldn’t exceed the price listed for a private-party sale.

Make sure to enter your car’s vehicle identification number (VIN) for the most accurate assessment. Save your search results for tax record purposes. You can use those pieces of information if the Internal Revenue Service (IRS) questions your valuation.

Suppose you claim that your car is worth more than $5,000. Getting a written appraisal from a licensed appraiser is necessary. Acquire a certified appraisal no more than 60 days before you donate your car.


Top 6 Reasons to Donate a Car to Charity

Aside from getting a healthy tax write-off, here are the other six reasons to donate your car to a charity:

1. You Save Space

Whatever your reasons for holding onto your car, you’ll be doing yourself a favor once you get rid of it.

Extra stuff can make you feel stressed. So why keep an unwanted vehicle? According to Mayo Clinic, a cluttered environment can make someone’s brain less effective at processing information.

If you have difficulty focusing, maybe it’s time to declutter. An old car sitting around a small garage takes up most of the space. Imagine how much room you would have by discarding that vehicle. You’ll also feel better knowing that a charity you believe in can make good use of it.

2. You Get Peace of Mind

Donating your car to a charity gives you peace of mind knowing that your car is in good hands. You don’t have to worry about storage or maintenance issues as well.

3. You Save Money

Maintaining a car that you don’t drive often can be costly. If you let your car sit for too long without driving it, its brake fluid can get stale, and its oil won’t lubricate as it should.

The metal components of your car must be lubricated, or else you’ll hear the ticking noise of metal. Worse, your engine will start overheating.

By donating your car to a charity, you save money by not making repairs. You also save yourself from paying for insurance on a car you don’t even drive.

4. You Can Support Charitable Work

Many charities can make good use of your car as long as it is still in decent condition. They can use it to take people to clinics, deliver meals to the elderly, or do any service that furthers their mission.

5. You Avoid the Hassle of Selling the Car Yourself

An old car can be a tough one to sell. Aside from spending a huge amount of money to improve its appearance, you also have to deal with pesky buyers.

You also expose yourself to potential privacy concerns because selling a car means you have to advertise your contact information.

You don’t have to go through such nuisances if you opt to donate your car to a charity.

6. You Experience Gratitude

Barbara Fredrickson, a world-renowned researcher, says that when people express gratitude in words or actions, they boost their positivity and other people’s.

So start cultivating a spirit of thankfulness by donating your car to a charity of your choice.

How to Determine if a Charity Is Eligible to Receive Tax-Deductible Donations

The IRS provides a tool that can help you determine if giving to your favorite cause can give you a tax deduction. Go to Tax Exempt Organization Search (TEOS) and search for tax-exempt charities.

You can use TEOS to know if your donations to an organization are tax-deductible charitable contributions. TEOS tool also provides information about a charity’s federal tax status and filings.

If you’re interested in donating your car but don’t like the paperwork that comes with it, send us a message and let Cars2Charities do it for you.



1. Charitable Contribution Deduction: Rules and Changes for 2022 https://www.investopedia.com/articles/personal-finance/041315/tips-charitable-contributions-limits-and-taxes.asp

2. A Donor's Guide to Vehicle Donation https://www.irs.gov/pub/irs-pdf/p4303.pdf

3. How decluttering your space could make you healthier and happier https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/how-decluttering-your-space-could-make-you-healthier-and-happier/art-20390064

4. 5 Ways Giving Is Good for You https://greatergood.berkeley.edu/article/item/5_ways_giving_is_good_for_you

5. Here’s how taxpayers can check if their charitable donation is tax deductible https://www.irs.gov/newsroom/heres-how-taxpayers-can-check-if-their-charitable-donation-is-tax-deductible