5 Good Reasons to Consider Donating Your Vehicle

You and your car had a good run. But now it's time to move on. You might be thinking about resale value and lining up a buyer, and that's certainly one way to go. It's not your only option, though.

Donating cars is becoming an increasingly popular way to get rid of old vehicles and do some good in the process. Here are five reasons you may want to consider it.

1. You'll be helping a great cause

Donating to charity -- whether you give money, time, goods, or a vehicle -- can help further that charity's cause and help those in need. If you'd like to give but don't have much money to spare, you might consider donating your vehicle instead. Some charities use them to transport goods and members, while others sell them and use the proceeds to fund their mission.

Just make sure you choose a qualified tax-exempt organization to donate to. You may already have one in mind. Otherwise, look into what charities are operating in your area and inquire whether any of them could benefit from a vehicle donation.

2. You'll get a tax break

You can qualify for a charitable donation deduction on your taxes if you donate your vehicle. But you must itemize your deductions to do this. 

If the charity holds onto the vehicle, your deduction would be the fair market value of the vehicle. But if the charity sells the vehicle, your deduction is the lesser of the fair market value or the proceeds from the sale. However, if the proceeds are less than $500, then your deduction is the lesser of $500 or the fair market value for the vehicle.

If you're not sure how donating your vehicle will affect your taxes, you may want to consult a tax professional before doing so. They will also be able to advise you on what types of documents you need to prove you've donated the car.

3. You could save yourself a lot of money

Donating your vehicle could save you money if you don't plan to replace it with a new vehicle. You'll eliminate auto insurance payments, maintenance and gas costs, and yearly registration fees from your budget. That could potentially save you thousands of dollars per year. 

Of course, it could make life more difficult for you in other ways. You may need to pay to rent a car or pay for public transportation in its place. But these costs will likely be far lower than what you'd pay to maintain and keep car insurance on a vehicle you own.

4. You'll save yourself the hassle of selling

Selling a vehicle means haggling over prices, test drives, and getting offers from competing buyers. It can be stressful, especially for vehicles that aren't in perfect, working order. And it can be downright impossible for those who have misplaced the title to their vehicle.

Donating your car can make things a lot easier. All you have to do is find a charity that wants the car and sign some paperwork. They'll take it off your hands so you don't have to worry about disposal either.

5. You could help the environment

If the charity donates your car to a company that scraps or recycles vehicles, you could be giving your car a new lease on life. These companies take parts from the vehicle, like the steel used to make the frame, and recycle it to put into new vehicles or other products. This is much kinder for the environment than producing brand-new steel.

Donating a vehicle may not be the right move for everyone. But it's an option worth weighing if you don't want to deal with the hassle of a sale or are concerned about getting a fair price. Weigh all of your options before you decide which is right for you.