When you are ready to buy a new car, you may think of trading in your old one or selling it to a private owner. If you don't need the trade-in credit, or if you think you won't get a good price for your old car, you should consider donating your car to a charity or car donation program. There are many reasons to consider donating your car when you are finished using it, all of them good ones.

The first reason to consider donating your car is that it may financially benefit a local or national charity. When you donate your car, charities are often able to have the car cleaned and fixed for free by those who donate their services to the charity. After the car has been spruced up, it can become a part of an auction or silent auction where the proceeds benefit the charity holding the event. Even if your car only gets a few hundred dollars at auction, these dollars will go toward helping a worthy cause.

Another good reason to donate your car to a charity is that the car may change the life of someone in need. For charities who do not auction off the cars that are donated, there are many programs in place that connect needy people with a donated car. Your old car might be given to a single mother who needs to get to work each day to feed her family or to an elderly person who needs to get to many medical appointments each month. When you donate your car to such a charity, you can feel a sense of satisfaction that you will be helping someone less fortunate than you.

A less altruistic reason for donating your car to charity is that you can receive some very helpful tax benefits from this donation. Before you donate your car to the charity of your choice, you should consult with an accountant, tax attorney, or tax advisor. He or she will be able to help you come up with a plan for donating your car that is the most beneficial for your financial status. In some situations, you will be able to deduct a part of the car's value, or even the entire value of the vehicle, from your tax obligation. Car donation is truly a situation that benefits both parties because it allows you to receive tax benefits while helping a needy person or worthy charitable cause.

Some people may wonder who benefits from their car donations. Since a wide range of nonprofits rely on car donations, many people can be helped. Some benefit because they can get a free or low-cost car that has been donated and use it to get a job and make a better life for their family. Other people don't benefit from the car donation itself, but from the money that can be generated from selling donated cars at auction. Charities take the proceeds from these auctions and can distributed them directly to people in need or use them to provide shelter, buy food, or administer programs for people in need.