What more is a valuable gift than choosing to donate a car to your charity. Through a good act such as this, you will be able to help fund nonprofit programs or provide transportation for low-income people in need. Although the process of donating a car is pretty simple, there are a number of factors that you will have to consider before proceeding to the actual donation process to protect yourself from liability and fraud as well as ensure that your chosen beneficiary gets the most value out of the donation while getting the highest possible tax deduction. This article will give you the necessary things you need to take when donating your used car to avoid getting scammed.

            Direct donation versus Intermediary organization – Car donation to charity is a big business to engage yourself in, based on local studies, there are over 250,000 cars donated every year, thus resulting in hundreds of millions of money in tax deductions. Because of this, intermediary organizations response by setting up a shop all over a country to act as a middleman between you as a donor and the charitable recipients. Reputable middleman keeps up to 50% of the profits, while non-reliable middleman keeps up to 90% of it. If is it possible, always opt to donate your car to the charity yourself to maximize the benefits that both parties can get.

            Choosing a charity – Your recipient must get qualified by the IRS to accept tax-deductible contributions if you are hoping to take a tax deduction as a result of your vehicle donation. When donating a vehicle to your chosen charity, they will most likely use it one of three ways:

  • They will keep the car and use it for their daily operations.
  • They will give the car or sell it at a discounted price to a low-income person in need.
  • They will sell the car and use the money to help offset administrative and fundraising costs or to fund their program.

            You may want to ask your chosen charity the question you have in mind if you want to take control of the use of the car or the proceeds.

            The nuts and bolts of your car donation – Once you found the charity you will want to donate your car to, you will need to do several things:

  • Call your insurance carrier and cancel your rights to the policy; also visit your dealership to transfer the title, cancel the registration, and fill out a notice of transfer or release you a liability form (which will vary from state to state).
  • You will also need to fill out some papers for the charity, although these forms may vary among different organizations.

            After your donation, you must be able to receive a written acknowledgment from your chosen charity. The best way to make the most use of your tax deduction is to give the car to a charity, thus, they will either use it or give it away or sell at a discounted price to a person in need. There are no other ways you can avoid getting scammed but following these tips and doing your research. For choosing cars that you can donate, check out cars com.