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When you donate your car, a charity may use the proceeds from your auto donation to fund local or national programs. Donating your car to the right charity also allows you to claim the car’s value as a tax deduction. Giving your car to charity also helps to free up space in your garage or driveway.
Steps for Donating Your Car
When donating your car, you need to follow the right steps to make sure you donate to a legitimate charity. Following the right steps minimizes the risk of an IRS audit and maximizes the amount of proceeds from your donation. Here are the steps on how to donate your car to charity:
Choose a Reputable Charity
Research reputable charities that accept car donations and choose the one that handles all transactions without a middleman’s help. Such a charity retains all the profits arising from your auto donation. The charity you choose should also have a 501(c)(3) status. Charities with this status are tax-exempt and give donors the advantage of claiming the car’s value as a tax deduction. You can verify the status of the charity from the IRS website before donating your car.
Prepare Your Car for Donation
Before giving your car for donation, remove all personal items. Clean the car and remove the license plate. You can also inflate the tires to facilitate easy transportation or towing to the charity. Gather all the car documents, including the registration and title. These documents will help you and the charity to complete the donation paperwork correctly and quickly.
Complete the Donation Paperwork
To avoid liability on the car after donation, fill out all the transfer paperwork including the release of liability form. Completing the donation paperwork serves as proof that you have formally transferred the ownership of the car to the charity. You will also need to sign the car’s title over to the charity. Fill in your name, the name of the charity, and the odometer reading of the car on the title. On the sales price section of the title, indicate that the car is a charitable gift. To get tax benefits from your car donation and avoid problems with the IRS, get a written acknowledgment from the charity.
Schedule a Pick-up or Drop-off
Agree with the charity on the appropriate time to drop off the car. If your charity lacks a free means of transportation, you can hire a local hauler to pick up the car. Choose a hauler that charges an affordable fee to minimize the cost. Take advantage of free services by choosing a charity that offers free pick-up or drop-off.
Transfer the Title
Hand over the signed title to the charity after the car is delivered to the charity. The charity will then complete the donation by signing the title against their name and address. By signing the title when donating your car, the charity formally assumes ownership of the car and releases you from any liability.
Notify the DMV and Your Insurance Company
Notify the Department of Motor Vehicles about the transfer of car ownership after completing the donation process. This will help the DMV to legally release you from all liabilities associated with the car. You will also need to notify your insurance company that you have given your car to charity. This will facilitate the termination of your insurance contract and stop future premium deductions related to the car.
Also Read: Accident Claims Lawyers: Seeking Justice and Compensation
Make an Auto Donation to Charity Today
Giving your auto donation to a charity will help in supporting charitable programs. When donating your car in charity, follow the right steps to avoid legal issues in the future. Contact a trusted charity today and learn how you can donate your used car.
