I was thinking of donating my used car to charity when I buy a new one. I know the donation can be tax deductible, but what I don’t know is who sets the amount. If I trade the car in to the dealer when I buy the new one, I don’t think I’ll even get $100. (it’s old and crusty) Would it be better for me to donate, or just trade in? I have heard that charities will pick up a car even if it’s not running, so I’m thinking they don’t really care about the condition of the car. Has anyone done this? What’s the Straight Dope? 
Rose
I believe you would value it at the blue book value or any other reasonable standard you can find.
The IRS probably won’t care unless you attach some outrageous value to the car that you can’t back up. If the car is worth $100, it won’t have much effect on your taxes. However, you probably did something useful with your old heap you so can get some karmic payback.
If it’s a real junker, a car dealer might not even want to hassle with it.
Regardless, you can probably claim a higher price on your taxes than what a dealer would give you for it.
I don’t think I got much back for my 1982 (or thereabouts)Buick Skyhawk with about 80K miles on it when I traded it in in 1989. I think I got about $300 for it.
I once gave mine to charity, they paid $35 & come & got it too. I even got to take any parts I wanted from it, which I did & sold to a guy on the net who specialized in that old model.
But 20/20 did an article on the charites & the vast majority [e.g. all] didn’t give the money to charity at all.
When I donated my car,they came and picked it up, and gave me a copy of the blue book page with its value.I used a lower value on my taxes because I knew it needed work. Apparently, a lot of people doing this are using either using the blue boook value without the adjustments for high mileage,etc, are completely making up the value,or the cars are not really going to charity,because the IRS recently started paying more attention. They also gave me a copy of the IRS form for donations over $500 with their part filled out.As far as scams, I’m sure there are some, so I donated it to a charity I already knew, rather than one I never heard of before I saw their ad.
Yes, some of them are scam artists but it doesn’t sound like anyone is going to get rich off of your beater. That was some consolation to me when it sold my car to a weird place. At any rate, try to choose a charity with an established name. Then follow the blue-book advice others have given.
On a more detailed level…As I understand it, there are some places which make money off the car by reselling it to some poor bastard who needs wheels bad. Truly rotten cars can be solf for parts or scrap, of course. Now what I’ve also heard, but have not verified, (I think ricepad told me this) is that some companies have a legal limit to how much they can pollute the air–but they can get “credits” for removing another pollution source from our fair planet. So if they show they have junked enough cars (thereby ending the cars’ contribution to air pollution), they get permission to spew more stuff themselves.
There are also some charities–too few of them, regrettably–who take old cars and fix them up and give them (or sell at reduced cost) to people on public assistance who need cars to get to jobs. Often a lot of the mechanic work is donated. The ones I know about are great organizations and if you can find one, maybe they will take Ol’ Nellie.
Damn, Cranky…you have a good memory! Musta been 3 or 4 years since I told you that…
I gave one of these charities a vehicle once. They came and got it and gave me a filled in form for my taxes. Very painless. The esitimate was essentially blue book. They are probably pretty good about knowing what you can get away with, as it’s in their interest to make the deal attractive, and if they pushed it too far, the IRS would clamp down on THEM as well as the people using their estimates.
I saw some show on TV. Some woman donated a car to charity and it didn’t go to charity. They also did not change the registration on the car. Then they racked up a ton of parking tickets that she had to pay. So I would be careful with which charity I picked.
We donated our last car to the Vocational Ed school of our local school district. They train the kids to be mechanics by fixing up the old wrecks, then sell them to raise money.
We documented the deduction by finding an ad in the paper for a comparable car. The retail value in our location (Colorado) was higher than blue book because the car had 4WD (it was still only $1000–the car was pretty old). I believe any value that you can show is reasonable (like an ad) is acceptable to the IRS.
Disclaimer: I am not a tax attorney :).
Rick
The Council of the Blind, National Kidney Foundation, et. al. DO donate the money to charity. Some of the money (typically about 10%) goes to the auctioneer or other agent who sells the vehicle and some goes to cover radio and print advertising costs, towing, paperwork, etc. The remainder (not much, but it adds up) goes to the Charity.
Kelley Bluebook value (wholesale with mileage adjustment) is the typical tax deduction.
Perderabo, the registration problem has nothing at all to do with the charity. If you donate your vehicle you should remove your registration stickers from the tags and inform the DMV that the vehicle is no longer your possession. Donation centers which handle the gruntwork for the various charities never tell you about the risk of the new owner driving around racking up tickets on your registration because it would scare many people away from the whole process. If you keep your donation paperwork, you will never have to pay any fines incurred by the new owner.
Donating is almost always a better idea then trading the car in at a dealership. Just make sure you talk to the DMV and keep the paperwork in order.
If you have registration, you get a form with the registration called a sellers form. You are supposed to mail it out yourself & send it in. This protects you shoud the idiots collect a lot of tickets.
Also, you car is going to be sold to someone from the charity lot. The people who are selling it & pocketing most all of the money, usually lie about the condition just like any other used dealer.