If you're planning to donate your car, boat or other vehicle to a charity, then you should be aware of the potential for scams and cons with car donation centers. Although it's a common practice for legitimate charities to use vehicle donation services to manage the collection and resale of the donated vehicles, the IRS cautions that you should ask a lot of questions before donating your automobile.

• Make sure the charity you are donating to is a qualified charity that is a real non-profit organization and that makes you eligible for a charitable contribution tax deduction.
• If you are concerned about a charity's not being legitimate or not using the money from the car donation wisely, look at the charity's registration and financial documents on file, usually with the State Attorney General's Office or the Secretary of State. You can study the documents to find out how old the charity is and see the ratio of revenue that goes directly to its charitable operations versus the revenue used for running the charity.
  
• If you are dealing with a car donation center rather than the charity itself, ask what it intends to do with the car you're donating--will it be used by the charity or given to the needy, fixed up significantly, or sold?
  
  Ask the charity how much of the proceeds for the car go to the charity, rather than the service that organizes the charity. Mark Everson, the IRS Commissioner, states that contributing to charities is important, but says that in some instances, the charity gets very little.
• Although it's common for charities to contract with a car donation service to run the program for all its vehicular donations, be aware that some charities let car donation companies use their names in return for getting paid a small fixed fee. This may not really benefit the charity in any significant way.
• Get acquainted with what you need to do to take your tax deduction on the charitable vehicle contribution and how much you're likely to be able to deduct. Knowledge is power; when you know the facts, you won't be taken in by misinformation, exaggeration or misleading statements.
  
• When viewing the advertisements for car donation centers, be wary of any statements of exaggeration or exorbitant promises that make it seem as though you will always get fair market value for your car no matter what a junker it is. This is not true.
• Make sure you officially transfer the title of your vehicle with the appropriate state authorities. If the title is not properly transferred, you may find yourself liable for costs incurred such as towing and storage fees. Depending where you are, you may need a record of sale as well as signing over the title if you do not transfer the title in person. Contact your state's Department of Motor Vehicles for more information.
  
• If you are suspicious of the organization or the vehicle donation program, or feel that you have been misled, contact your State Attorney General's Office and speak to the official who handles charities. See Resources and Helpful Links.

Read the following articles for more information on the best way to donate your vehicle to a charitable cause:

How to Donate Your Car to Charity and Get a Tax Write-Off

Learn the steps you need to go through to donate your car so you can take the tax benefit.

Vehicle Donation: Can Cars, Boats, Trucks and Motorcycles Be Donated to Charity?

Learn the answer to the question, "What vehicles can be donated?"

How to Get a Tax Deduction for a Car Donation

Before you donate the car, learn what you need to do to make sure you can take the tax write-off.

Donating a Vehicle for Tax Deduction: Resources and Helpful Links

Find links for more information as well as a complete list of articles in this series.