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What it Can Mean to a Needy Person

If you’ve done the math on the financial benefits of donating a car versus selling it, you’ve probably come to the conclusion that it is actually better — just strictly financially – to sell the car. This is especially true if your car is worth more than $1500.

You will not get your $500 tax deduction, and you’ll have to go through the hassle and spent time selling the car yourself, but you’ll walk away with a bit more money. The exceptions to this are if you are in a very high tax bracket, or if you can leap the hurdles the IRS sets up for getting more than a $500 tax deduction. See our other articles for more information about that.

So let’s assume selling your car is a bit better than donating it – just from a financial perspective. But maybe your decision on whether or not to donate your car is about a bit more than money. If it is, then you’ll want to know what you “get” for donating the car, even if its not you that’s really getting anything more than knowledge of what your donation means.

So what does your donation mean? It depends on two different scenarios. In the first and most common scenario of car donation, the charity you give to will bring your car to an auctioneer. Your car will be sold at auction to the highest bidder, the car auctioneer will take his cut, and whatever is leftover goes in a check to the charity. Its up to you to decide how much it means for that charity to get that check. Keep in mind that what the charity actually gets may be considerably less than even the Blue Book value of the car you gave them. Expecting them to get about a $300 net donation is usually about right. If you feel really strongly about the work the charity does, maybe that’s a good deal. A lot of people have pointed out, though, that if you really wanted to get maximum dollars to the charity, you’d sell the car yourself for the best price you could get for it, and then donate that whole sum directly to the charity. And this is true. Giving them the car just gets it out of your driveway faster.

The second scenario has much more powerful results. Some charities (not many, you’ll have to hunt for them) do not sell the cars they get at auction. They actually use the car, or they give it directly to a real person who needs a car. This is the scenario where your car donation really comes to mean a lot more than just dollars and cents. To get a sense of what it means, consider giving up having any access to a car for the next month. That would mess up your life and your agenda quite a bit, wouldn’t it? That’s what the people who would be getting your car have been dealing with. They have to do favors for rides from friends, use up an extra 2-3 hours a day using public transportation, and generally work their life around being able to get from place to place.

For a lot of single moms on welfare, having or not having a car is the difference between staying on welfare or getting a job. With the car, the equation changes so its worth it to get a job, but without the car, the transportation costs, the time lost, the childcare and all the other hidden factors make it financially better to stay on welfare. And that’s just one scenario. Injured veterans are another huge group of people who need these donated cars. The difference your car can make to them may mean $200 less for you just in financial terms, but knowing how much a difference your car is making in someone’s life might be worth way more than $200 to you.

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