Junk Car Donations - How You Can Help?

Answer 1

During the past year, the “cash for clunkers” program took several cars off of the road in order to provide both an economic shot in the arm and an environmental benefit. The program may have passed, but the need for car owners to get rid of cars has not. And this goes double for cars that are beyond their useful life, even with used car salesman. Fortunately junk car donations can provide a much needed source of income for several worthwhile charities and sometimes provide a tax benefit, albeit lower than regular car donations.

Difference from used car donations

Junk car donations differ from used car donations. Used car donations are typically resold to used car dealers by charities as a fundraising mechanism. In these cases the fair market value of the car is deducted from the actual auction value and that forms the basis of any tax deduction. Cars that are in disrepair (from collisions, etc.), however are valued based on their transfer value. These types of cars are typically sold not as whole units but rather as parts for older cars. In addition to cars, RVs, motorcycles and other motorized vehicles can be classified as junked and donated both to support worthwhile charities and to obtain a tax deduction.

Where to Donate:

If one is looking for a tax write off for their junk car donation, there is no better resource than the IRS. The IRS maintains a list of charitable organizations who qualify for a tax write off. Even if a person is not particularly interested in a tax deduction this can give you an idea of what organizations in your area accept these types of donations.

Other sources of information for donations include the local yellow pages and newspapers. Where they are not listed directly, the listing of charities can often yield several worthwhile groups who would love to accept your donation. Be sure to check out any particular paperwork you have to fill out in order to transfer the pink slip, and make sure to get receipts in order to document your donations.

Conclusion

Junk car donations, while not as common as used car donations, are still a source of income for charities who have a need for funding, especially in these hard times. Donations can not only provide a worthwhile cause with some much needed cash, but in certain situations it can also provide a tax break. The key is to find a good charity with the right paperwork.