If you missed out on Cash for Clunkers, don’t despair! Penske Automotive Group has a couple of ways you can get rid of your clunker and help some great charities at the same time.
While many people don’t think of donating their used car, it’s a great way to give back to our community. And although won’t get money back like you would with a Penske trade-in you probably will be eligible for tax deduction come April 2012.
It sounds like a winning situation for everyone. But donating your car is not as simple as it seems. There are a number of things you should do before you hand over your keys. If you are interested in donating your car, here are a few tips to help you get started:
1.Find an Organization You Trust
There are many organizations that accept donated cars, however, before you hand over your keys, it is important to do some research. Find an organization that supports a charity that you would most like to support. Penske Automotive Group recommends reviewing these sites: Free Charity Cars, Better Business Bureau site, Charity Navigator, Cars 4 Causes and Salvation Army.
2. Find Out How the Donated Car is Used
Once you donate a car, it can be used a variety of ways. If the car is in working condition, sometimes the charity sells the car or will give the car to a deserving recipient. If a third-party broker is involved, the charity may only receive a portion of the resale price of the car or simply a flat free. It is important to find an organization that can benefit the most from your donation.
3. Verify The Organization is Tax Exempt
Before you donate your car, verify the organization you are donating to is tax exempt as a charity under section 501(c)(3) of the IRS code. You should check the IRS database (http://www.irs.gov/app/pub-78/ ) to make sure the charity is eligible to receive tax deductible contributes. Keep in mind that while donations to a church are tax deductible, churches are often not included in the IRS database.
4. Keep Paper Trail
For April 2012 tax purposes, you should take a photo of the car and keep copies of estimates for your used car. If your car is worth more than $5,000, you will need to get a written professional appraisal. Once you donate your car, you should keep any proof that you made a charitable gift. It may be smart to transfer the title of the car to the charity and keep a copy of the document.
5. Avoid Middlemen
Numerous for-profit intermediary organizations advertise aggressively on TV, billboards and elsewhere, offering to help you donate your vehicle to charity. Here’s the catch: These organizations typically keep about 50 percent to 90 percent of the vehicle’s value for themselves, and the charities don’t get what they could have gotten. To prevent this, check directly with charities you admire and find out whether they accept car or boat donations.
Good luck and let us know what your experience is like.