2 Important Questions To Ask Before You Donate A Vehicle To Charity

If you have a vehicle that you want to get rid of, donating it to charity can be a good way to clear out the space in your garage. Your car will go to good use instead of ending up in a junkyard or landfill, and you can even get a deduction on your taxes. However, before you turn over your keys and sign over your title, there are a couple of important questions that you need to ask.

Is This a Legitimate Charity?

Before you give any donation, especially one as valuable as a car, you should always check to make sure that the charity you want to support is a legitimate charity. It's sad, but there are scams out there that will accept donations that never end up being used for any charitable works. Be wary of charities that have overly cutesy sounding names, charities that are vague about their mission, or charities with names that sound similar to the names of bigger and more well-known charities.

There are a couple of different ways that you can check out a charity to make sure that it's legitimate. For example, there are online services that vet charities – just search for the charity you're interested in to find out its rating. You can also search the IRS website to find out if a charity is registered with them. That's helpful, because in order to receive a tax deduction for your donation, the charity must be registered with the IRS.

How Will Your Donation Be Used?

Usually, charities can use donated cars in one of two ways. They can keep the car and use it so that members of their organization can drive it when performing services for the charity. For example, if the charity involves delivering meals to shut-ins, they might use the car to deliver the meals. In this case, the car would have to be used for the charity's purposes only, not for personal use. The other option is to sell the car and use the money to fund the charity.

There are a couple of reasons why you need to know how the charity you've chosen will use your vehicle donation. For one thing, it affects your tax deduction. If the charity is driving your vehicle, you can deduct the fair market value of your vehicle. But if the charity sells your vehicle, you can only deduct the amount they sold it for, regardless of the value of the vehicle.

Additionally, it's always important for donors to understand how their donations will be used, because it helps you make better donating decisions. You should always try to put your donations where they can be of the most use. You want to make sure that as much of your donation as possible goes to the charity's mission, rather than to salaries or overhead.

Don't hesitate to ask questions before making a vehicle donation. With a little research, your old car can end up being of great benefit to a worthy cause.