Should You Donate Your Car To Charity?

Car donations have long been a popular form of fundraising for charities, but it may not be something you know a lot about. We’re here to help break down the process, and help you determine if donating your car to charity is the right move for you. Below, we answer your questions and provide some tips on what types of charitable organizations you might consider donating to.

How Do Tax Deductions Work?

One major reason some people choose to donate their car to charity is for the tax deduction. It’s something you might have heard of before, but do you know how it works? The truth is, donating your car to charity can have some major financial benefits, so long as you know what to do. In most cases, it’s a simple process. First, you need to know how much the charity is selling the car for, or how much the fair market value of the car is. If the charity sells the car for $2,000, you can deduct $2,000 from your taxes, even if the fair market value is $3,000. However, if the charity sells the car for less than $500, but the fair market value is $1,000, you can deduct the $1,000 sum [1].

To then actually make the deduction on your tax return, you need documentation of the donation, which the charity will supply. The document should include your name, the car ID number, and the date of donation. If the donation deduction will be greater than $500, you will need additional tax form 8283, which you can easily find online. With this information, you can then file your taxes, including the deduction information. You can do this whether you are filing your taxes yourself, using an online filing service, or using a tax accountant. The amount of the donation will then be subtracted from any money you are expected to pay the IRS.

Benefits Of Donating Your Car To Charity

But what are the actual benefits of donating your car to charity? It may seem hard to understand what charities can do with these cars, and how it benefits others. The fact is, there are several ways these types of donations can be beneficial to charities. Organizations that receive car donations are able to in turn sell those cars, and use the proceeds in a number of ways, which include but are not limited to: housing, food support, medical and mental health care, and disability resources [2].

And there are also several benefits to you, personally. As discussed above, of course you get a tax write off. But there are other benefits as well that you might not have thought of. You can save money if you’ve been paying to store the car; you no longer have to worry about fixing up or working on a broken down vehicle; and if the car no longer works at all, many charities will actually do the towing for you, for free. And of course, there is the mental benefit, as well. You can have peace of mind knowing the car went to a good place, somewhere that it can do some good. That sort of good feeling can have a meaningful impact on your own personal mental health, and that is something you can’t always put a price on.

So How Do You Go About It?

If you’ve determined you want to donate your car to charity, you need to know how to take the next steps. First, you should find a charity that directly accepts car donations. You want to steer clear of organizations that accept the cars on a charity’s behalf, sell the car, and then give money to the charity. Sometimes, this means not all of the proceeds make its way to the charity. Look for charities that accept and sell the cars themselves, so they keep 100 percent of the money [3].

You also want to make sure the charity you are donating to is a registered 501c. This means you know it is properly a non-profit organization. Next, you need to ensure ownership of the car is properly transferred. You must make sure the car is signed over to the charity, so you do not remain responsible for things like parking tickets or potential car insurance problems due to accidents. If a charity does not make you properly sign over ownership, you should look for a different charity, as it means they might not be on the up and up. 

Who To Donate To

There are a multitude of organizations that accept car donations, so you shouldn’t have a problem finding an organization near you to work with. Some groups to keep in mind are veterans associations, organizations helping women and children facing domestic violence, and homelessness support groups. These are types of charities commonly known to accept car donations, and are a good place to start your research. But don’t feel boxed in—do your research and seek a charity that calls to your own sense of service. 

If you still have questions, it could be beneficial to go in and talk to someone at the charity you are thinking about donating to. Car donations are a common occurrence, and it is a good bet that someone will be able to answer your questions and help guide you through the process. Considering donating your car to a charity is an incredibly benevolent act, and something you should be proud of—so don’t hesitate in moving forward with your plan!


  1. How Do Tax Deductions Work When Donating a Car? – TurboTax Tax Tips & Videos (
  2. 7 Reasons To Donate Your Car To Charity (
  3. Guide To Donating Your Car : Charity Navigator