How You Can Benefit from Car Donation

Don't dump it, donate it!

Don't dump it, donate it!

I’m sure there are some people out there – perhaps you’re one of them – considering taking the government up on their offer to trade in your old beater for a screamin’ deal on a new car.

I don’t think you should do it. Frankly, I think the auto industry has benefited enough from government help. I mean Chrysler should be out of business today, and GM would probably be in liquidation phase right now if the White House had never stepped in and saved their butts.

This Cash for Clunkers thing isn’t about saving the environment. If it was, the program would accept vehicles built prior to 1984. Don’t be fooled by anyone – the CfC program is a front to throw more money at the automakers, and it’s working.

Think about it: Say you have a 2000 Ford F-150. With a combined fuel efficiency rating of 15 mpg, the vehicle qualifies as a clunker and is eligible for a $4,500 credit on a new 2009 Ford Focus. The F-150’s trade-in value is about $3,600 anyway, so really you’re only getting $900 extra toward the price of the Focus. If you need to get rid of your truck, why would you trade it in to benefit the automakers? The truck  is certainly not a clunker and could benefit someone through donation.

I spoke with Pete Palmer, co-founder of the Vehicle Donation Processing Center, to clear up some confusion and misconceptions about donating cars. Here’s what he said when asked about donating a car rather than selling or trading it:

A car donation can be a great decision for anyone who wants to help people through supporting a non-profit organization. Charities need all the help they can get these days, and a vehicle donation can make a big difference in their ability to provide services. Car donations are also a great alternative for folks who want to avoid all the hassle, wasted time, and expense of selling a car. Car donation offers fast and free pick-up of your vehicle – plus you get a nice tax deduction.

Donating a car today isn’t as easy to write off as it was prior to 2005, though, when donors could deduct the vehicle’s entire fair market value. That’s when Congress stepped in and limited the deduction to $500, or whatever amount the charity was able to sell the vehicle for. Needless to say, car donations tanked.

Today, Mr. Palmer’s organization is part of a group supporting a new House Resolution that would, according to him,

allow car donors to take a write-off at fair market value up to $2,500 and an appraisal after that. This would eliminate the delay in donors knowing what their deduction would be and save a lot of paperwork for the charities. Proponents of the bill feel that since almost all other charitable donations are eligible for a deduction at fair market value, car donors should also get the fair market value when they donate a car.

Car donation can be a fast and easy way to get rid of an unneeded car, and you can feel good about your gift rather than feeding the auto industry’s returning greed. If there are charities you would like to support in your community, a good way to start would be finding them on VDPC’s charity search page.

One final word from Mr. Palmer:

The value of car donations to charities is not small potatoes. Our company alone has sent checks to charities totaling over $60 million – that’s net after all the towing type costs have been deducted. Auto donation is a terrific program for the non-profits and for all the people who find themselves with a car they don’t need and they’ve figured out that the amount they could get for selling it isn’t worth the trouble.

At what point would you consider donating a car to charity?



  1. Those were good tips on how to donate a car to a Good cause! Did you know another way to spread love is to donate a car to people in need? Check out Check out how Goodwill Car Donations helps people all over the country!

  2. We have a car that has a not a lot of miles on it and we think that donating will be a great idea! It was phenomenal to know from the text that if there are charities you would like to support in your community, a good way to start would be finding them on VDPC’s charity search page. There is a local charity here so we will be sure to get more information about how we can donate our car!

  3. You’ll be eligible for a tax deduction of at least $500 when you donate a car to charity at Cars4Charities. The process is fast and the pickup is free. They have hundreds of respected charities for you to donate your car to.

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