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Should I Donate My Car or Junk It?

Should I Donate My Car or Junk It

Tired of the old car that’s been sitting in your driveway for months taking up valuable space? Or perhaps you’ve finally upgraded from the clunker you’ve been putting all your money into for the last five years. Whatever the case may be, when you’re ready to quickly get a vehicle off of your hands you might be wondering: should I donate my car or junk it? The good news is that you can take your time so that you can make an informed decision. 

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Deciding whether to donate your car or sell it to the nearest junkyard mainly depends on your preference. If the vehicle is still in good condition it could be useful to your local charity. However, if it’s an old clunker that has bitten the dust then you could get some extra cash by selling it to the junkyard. Before you make up your mind, let’s explore both options.


Should I Donate My Car – What You Should Know About Donating Vehicles to Charities

Donating your old car to a local charity may seem like the easiest way to get rid of it. Depending on the organization’s needs and the value of the vehicle you are donating the charity may use the vehicle, sell it for a reduced price, or junk it themselves for the cash. 


In most cases, the vehicle doesn’t have to be running for it to be beneficial for a charity. Most charities that take automotive donations make it super easy for people to donate their used cars. All you have to do is contact them and they’ll even come and tow it away for free. 


Although, donating a car to a charity is generally safe there are some precautions you should take to make sure you aren’t held liable for anything that happens with the vehicle after you donate it.  


– It’s very important that you perform thorough research on an organization before you donate your vehicle. Believe it or not, there are a lot of shady organizations that run scams and use unethical business practices. Beware of organizations that promise a huge tax break if you donate your car. 

– Always get a receipt at the end of the transaction. If you plan on writing off this charitable donating on your taxes you will definitely need a receipt. 

– Don’t forget to remove your old license plates from the vehicle. Yes, the license plates are what ties you to the vehicle. In the event that something happens with the vehicle and your old license plates are still on it you could be held responsible. 

– Once you remove the plates, surrender them to your local motor vehicle agency and sign the title over the organization. 


Should I Donate My Car or Junk It – Tax Deductibles for Donating Vehicles

Whenever you are making a donation to a charity you should make sure you are doing it for the right reasons. A lot of times people decide to donate their vehicle because they believe that they'll get a huge tax break. However, this isn’t always the case. 


Perhaps one of the biggest downsides to donating a vehicle to a charity is that it can be difficult to reap the tax benefits. Doing the paperwork to file the donation on your taxes is complicated and it isn’t always worth the trouble. There are also specific criteria you’ll have to meet to claim a vehicle donation on your taxes. Here are some of the basic standards you’ll have to meet in order to be eligible to claim charitable donations:


  • The deduction can’t exceed 50% of your adjusted gross income
  • If the charity sold the vehicle you can only claim the gross proceeds on your taxes
  • Deductions that exceed $500 must include a written acknowledgment that contains your taxpayer identification number, the VIN, and a statement that states that no goods or services were provided by the charity in exchange for the vehicle
  • Written appraisal of the vehicle
  • If you plan on claiming a deduction of $500 or less you can just provide the fair market value of the vehicle


When you’re seeking a tax break for donating a vehicle to a charity you may need to seek help from a tax professional. There are several guidelines that must be correctly followed and tax forms that you’ll need to complete before the IRS recognizes your charitable donation. 


In most cases, people don’t get the big tax break they were hoping to receive. When charities do sell cars at their auctions oftentimes they don’t get more than $100-$200 sometimes even much less. If the organization decides to keep the vehicle and use it you won’t be able to deduct its full value on your taxes. 


Unfortunately, due to new tax laws, you can only claim charitable donations if you itemize all of your expenses for the year. The 2017 Tax Cuts and Job Act provides a standard deduction that’s typically worth more than itemizing your deductions. So come tax time, your car donation might not benefit you at all. 


If you decide to donate a car you should make sure that it’s to a charity that qualifies. You will only qualify for a tax deduction if you donated to a registered 501(c) (3) organization or a tax-exempt religious institution. Only make such donations to organizations that are experienced in handling car donations so that you won’t have a hard time getting the necessary paperwork completed. 


Whether you qualify for a tax deduction or not, donating your old car is always a good deed. If you are really motivated to help others and you want to get the vehicle out of your driveway, donating it to an organization of your choice may just be the right move for you.


Should I Donate My Car or Junk It – Charities That Accept Automobile Donations

No doubt, donating a car to a charity is a great way to get rid of a clunker and help your favorite nonprofit organizations at the same time. What many people don’t know is that most big organizations don’t handle the vehicle donation process themselves. Instead, they contract commercial or nonprofit fundraising agencies that handle every aspect of the process. Need some help finding a legitimate organization that will take your car donation? Here are few reputable agencies that serve as the middleman to you and your favorite organizations:


Charity Motors

Charity Motors is a popular organization that accepts all types of car donations. When a person donates a car to this agency they turn around and sell it to a family in need for fifty percent of the market value. The great thing about this organization is that they also donate a percentage of the proceeds to a charity of your choice. 


One Car One Difference

One Car One Difference is a major public awareness campaign. The entire donation process is handled by Insurance Auto Auctions. The great thing about this company is that you can use their website to quickly donate your vehicle. This company has contracts with top charities like Boy Scouts of America and the American Red Cross. 


AllState Car Donations

It’s important to note that AllState Car Donations isn’t affiliated with the insurance company. This is the fundraising division for the Center of Living and Learning. This company relies on car donations to fund their salaries and raise money for the programs they offer the communities in the area. 


Additionally, to ensure that your car donation is being used in the right way you should only donate to charities that are highly efficient. This means that at least seventy-five percent of the proceeds go directly to the programs and initiatives they stand behind 


Should I Donate My Car or Junk It – Understanding the Junkyard Process

People decide to junk their car after they’ve exhausted all of their options and the vehicle is no longer safe to drive on the road. Junking a car that has suffered a lot of damage due to a major accident or a vehicle that has several mechanical issues is the easiest solution for most drivers. 


The great thing about junking an old or damaged car is that it’s a good way to get some quick cash. When you call a junkyard to come to pick up your car, a rep will come to pick the vehicle up and make you a cash offer based on the value of the vehicle. Most junkyards won’t offer you more than $300 for a clunker. However, if the vehicle is still in decent condition you can get more money from it. 


Here are some benefits of junking your old car:


  • Yes, when you junk a vehicle you don’t have to worry about paying any out-of-pocket fees. The junkyard will come and tow the vehicle away. Some nonprofit organizations especially the local ones may require that you pay a towing fee when you donate your vehicle. 
  • Finding a salvage company that will take your old car for a reasonable offer is much easier than finding the right organization to donate the vehicle to. It can take a few days to find a legitimate organization and arrange for them to pick up the vehicle. Junking your car is a simple and stress-free process. 
  • The junkyard will take your car in any condition. Whether it has bad damage, emissions problems, or some other type of mechanical issue 


Should I Donate My Car or Junk It – What Happens to Junked Cars

Did you know that automobiles are the most recycled consumer product in the world? After all, more than 27 million cars reach the end of their lifecycle every year. This industry generates as much as $25 billion dollars a year. At the heart of the auto recycling industry is the junkyard. The junkyard generates enough steel to produce more than 13 million new vehicles each year. 


When cars are sent to the junkyard depending on the condition of the vehicle the parts are extracted and sold to consumers. Nearly ninety-eight percent of the car batteries in junked cars are removed and recycled. Although a driver may longer be able to drive it on the road, the vehicle is still valuable. Just about eighty percent of a vehicle by weight is recycled 


If the vehicle needs some work and is still operable, the junkyard may sell the vehicle at a reduced price. Some junkyards even go as far as making the needed repairs and selling the vehicle at its fair market value. 


Should I Donate My Car or Junk It – Weighing Both Options

Perhaps one of the best benefits of junking your old vehicle rather than donating it is that you don’t have to wait until tax time to reap the financial benefits. When you junk your old car you will be given cash in hand on the same day. If you are in quick need of extra money this may be the best option for you. Also, some people don’t have the extra time to hunt for organizations to donate their vehicles to. If you need to quickly get rid of a car, junking is the obvious choice. 


On the other hand, if you have the genuine desire to want to help someone or donate to a charity then it's a good idea to put some effort into donating your old vehicle to a worthy charity. Charities are always looking for donations to fund much needed programs for the communities that they serve. If your primary goal is to help in any way that you can then you should donate your old vehicle. You also have the option of junking the car for cash and donating the proceeds to the organization of your choice. If you decide to write the donation off on your taxes this method is much easier than claiming a car as a donation with the IRS. 


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