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How to Donate Cars to Charity and Save Money on Your Taxes

Updated on January 10, 2022
Pay less tax by donating your old car to charity.
Pay less tax by donating your old car to charity. | Source

Learn How to Donate Cars to Charity

Why would anyone want to donate their old used car to a charity when they could just sell it to someone else for a profit?

Learning how to donate cars to charity can be beneficial for several reasons.

  • First, it can help you save on taxes and get rid of a declining asset.
  • Second, the materials can be recycled and put to other uses.
  • Last, but not least, donating your car is good for the environment.

Furthermore, many people may hesitate to sell their car because they want to avoid giving their “lemon” to someone only to have it fall apart or have transmission problems soon after the sale. Nobody wants an angry customer to come knocking on your door demanding their money back and causing problems.

In these types of situations, one solution is to donate cars to a charity or a car disposal company that will put the proceeds to a charity of your choice.

Understanding How to Donate Cars to Charity and Vehicle Disposal Companies

So what really happens after donating your car to one of these companies?

When a car becomes useless and can no longer be sold to another person to drive, the best alternative is to sell the car to a vehicle disposal company that will make use of the car’s parts.

After the sale, you can fill out the appropriate paperwork for the charitable tax deduction.

Did you know that 95% of a vehicle can be recycled?

After a car is sent to be compacted and recycled, the majority of the steel can be used to produce new cars.

In fact, many of the new cars that we see on the street today are made of recycled parts. Materials that previously belonged to older cars are crushed, ripped apart and sold by disposal companies to car manufacturers who use those materials for new automobiles.

If you request, many of these disposal companies will forward the profits they receive from your compacted car to the charity of your choice.

Therefore, it is important to select the proper “green” disposal company to donate cars to so that you know where the money is going.

Vehicle disposal companies can make the process easier.
Vehicle disposal companies can make the process easier. | Source

Donate Cars and Save the Environment

Not only can you generate cash for charity when you donate cars, but you are also doing a good deed for the environment.

Older cars have terrible fuel economy and burn gasoline faster than the newer more efficient cars on the market today.

Simply by taking your car off the road, you are doing the planet a favor. You will certainly spend less on gas in the long run if you get a vehicle that has better fuel economy. It is a worthwhile investment for your wallet and the environment.

Furthermore, these companies dispose of your old car in an environmentally safe way that does not wreck havoc. When cars are disposed of in a proper manner, mercury and other dangerous materials are removed so they are not harmful in any way.

So remember, if you donate cars in this manner, you are completing a big step in the recycling process.

Recycle car parts to save on your taxes.
Recycle car parts to save on your taxes. | Source

Donate Cars and Save on Your Taxes

Donating your car to a green disposal company can also help you save money when you file your next tax return. When you say goodbye your old beater as a donation, you can use the profits generated as a write off for when you do your taxes.

Plus, since the proceeds from the vehicle go to a charity of your choice, other people in need can benefit from your decision as well. It is really a “win win” for everybody involved.

So once the time comes to take your old beat-up lemon off the road, remember to consider donating your car to a charitable waste disposal company to recycle. More often than not, it is better to donate cars for recycling and charitable purposes once they become too unsafe to drive.

The benefit of a charitable tax deduction and rewards to everyone else involved far outweigh the costs of leaving the lemon in the garage to rust.

Video: How to Donate Cars to Charity

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