What Happens to Your Donated Car?

If you’ve got a clunker of a car it could be a good time to get rid of it and do some goodwill towards mankind at the same time.
If you’ve got a clunker of a car it could be a good time to get rid of it and do some goodwill towards mankind at the same time. –iStock

The holiday season is a time for giving. It’s also a time for re-gifting. If you’ve got a clunker of a car it could be a good time to get rid of it and do some goodwill towards mankind at the same time.

Kevin O’Donnell is president and founder of Donate for Charity Inc., a group that helps connect numerous charities with donor cars, including about 30 groups in Massachusetts. He says car donations can be a great way to avoid the headache of fixing a car or save the owner the trouble of trying to sell it.

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“It’s a great way for non-profits to raise money and it’s a hassle-free way to get rid of a car,’’ said O’Donnell. “Most people don’t want the hassle of listing a car on Craigslist, putting their phone number and their address out there, and having strangers show up at their house for a test drive. Plus donors feel good about giving [a car] to a non-profit.’’

It’s also a good way to get a tax break. O’Donnell says a car donor can get a minimum $500 tax write-off.

So what happens when a car is donated to a charity? In some cases, the cars can be given or sold to someone who needs it at a very low price. But O’Donnell says there are three other outcomes.

“First, the charity could sell the car sold for its parts,’’ O’Donnell told Boston.com. “At least 75 percent [of donated cars] have a mechanical issue. A new transmission or engine can be really expensive, so there’s more value in selling it than trying to fix it and put it back on the road.’’

The next possibility is the charity could sell the car “as is’’ to a new buyer.

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“A buyer might want to repair it and put it back on the road,’’ said O’Donnell. “It could also be auctioned to a mechanic who wants to fix it or a used car dealer who thinks they can sell it.’’

The third thing is the charity could keep the car and make a good use for it. “For example Meals on Wheels could take the car and give it to their people who need it for deliveries,’’ he said.

Andrew Newton, a spokesman for the Larz Anderson Auto Museum in Brookline, says the museum usually sells donated cars to a car enthusiast.

“We are a licensed dealer and typically sell the cars (which are usually very used, high mileage cars worth under $5,000) online through eBay or just by word of mouth since there’s a big car community around us that includes plenty of tinkerers,’’ Newton said in an email.

If the car gets sold, Newton says the profits from the sale goes to support the museum’s educational outreach programs and the preservation of its permanent automobile collection.

If you are interested in donating a car, bear in mind this is an act of generosity that comes with plenty of strings. First, the charity must be a 501(c)(3) organization and must be considered tax exempt by the Internal Revenue Service. Plus, you’ll need to itemize your deductions.

Visit the Massachusetts Attorney General’s website and review the IRS’s rules and regulations before making any moves. If you’d like to pick a specific charity, Donate for Charity has plenty to choose from.

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