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Pros and Cons of Donating Your Junk Car

It can be hard to find anyone interested in taking your junk car off your hands. Find out how we make donating your junk car easy – Free pick-up service included.
Michael Brown
Michael Brown
06/23/2022 · 11 min read
Getting a Tax-deduction for your Junk Car Isn't a Cakewalk Getting a Tax-deduction for your Junk Car Isn't a Cakewalk Getting a Tax-deduction for your Junk Car Isn't a Cakewalk

Donating Your Junk Car

Ah, your first car. It may not have been the latest or greatest model back when you bought it, but the minute you rolled it off the car dealership, you could feel your heart racing with joy. The wind in your hair as you rolled down the window on the highway, you knew it would be a long time before you were ever going to get tired of driving this car.

Well, fast-forward to 10 years down the line, and your once splendid chariot of freedom is now more comparable to a rundown donkey cart, both in looks and the way it runs. The paint’s coming off at the edges, and every dent and scratch you’ve accumulated over the years sticks out miles for everyone to see. The transmission is sticky, and something is rattling in the engine that you just don’t dare to look into.

You have to admit, your old car is slowly becoming more of a nuisance every day, and you’d rather not invest a high amount of money for its maintenance. By now, you aren’t too keen on selling it either, if you can even find someone willing to buy it in the first place, that is.

But one thing’s for sure: you NEED to get rid of this car. After all, at this point, it’s just a sinkhole for your money, costing more in maintenance than it pays to keep the vehicle in running condition. And if selling it is a tough option, perhaps it’s time you consider donating your junk car.

The Pros of Donating Your Junk Car

You’ll be helping someone in need

Your car might not be worth a lot to you right now, but there might be someone out there who could use a vehicle but just can’t afford to buy one for himself; as the old saying goes, “one man’s trash is another man’s treasure”.

Now, you might be thinking, what good would a rickety old car do for anyone? But, you’d be surprised to know how much. Your donated junk car could transform a less fortunate person’s or family’s life, giving them more power over their careers, education, and daily lives.

Your donated junk car could help people get to work. It can also increase their employment chances since they can now travel long distances every day with ease. It may also provide transport to and from school for young children, or help parents get to their jobs without relying on public transport.

Your junk car donation could go a long way in the lives of the recipients. It could even help someone start or improve their small business, now that they have a car to make deliveries in. Even if your car is a literal pile of junk, proceeds from selling it off to a junkyard might still bring in some money for a low-income family.

Never underestimate the good that you can do, especially for those in less fortunate circumstances than yours.

Get rid of your unwanted car

As you might well be aware, selling your unwanted or junk vehicle isn’t always a piece of cake. Actually, scratch that, it’s NEVER a piece of cake. Finding a buyer alone is quite a challenge when you’re selling a car that’s in top condition, so one can only imagine the work it’d take to find a buyer for your junk car.

Donating your junk car, on the other hand, isn’t so difficult. In fact, some charities will line up to take it off your hands, so you really don’t need to go through the hassle of finding buyers, then entertaining their annoying questions, and haggling for a price you’ll never be satisfied with anyway.

What’s more, is that donating your car will help you be rid of it sooner too. While it might take you a couple of weeks, months, or even years to find the right buyer for your car, donating is a quick and straightforward process. Plus, you won’t have to wait long to dispose of the eyesore that’s been blocking your driveway for ages now.

No need for repairs before donating

Just as you won’t be too tempted to buy a run-down car yourself, no prospective buyer would even look twice at your car if it’s not in suitable working condition. This means, if you want to sell your junk car, you’ll first have to fix it up, both on the inside and the outside, only after which you can hope to sell it at the fair price it’s worth. And the older the car is, the more expensive and tedious these repair jobs tend to get. Besides, even if you decide not to sell your junk car altogether, you’d still need to fix it up before it can be of any use to you.

Donating your junk car takes care of this problem. You’re already giving your car away to charity, so they have absolutely no reason to force you to repair it before you give it away. Best to just leave it to the organization that takes your car, or the person who ends up with it, to sort out the repairs themselves.

Eligibility for a tax deduction

As it turns out, junk car donations or donating any car at all are tax-deductible. This means you can get a significant tax write-off for that junk car if you give it away to charity, provided its fair price is above a specific value ($500 in this case).

The process is a little complicated and involved. Still, by and large, most Americans who donate their junk cars to charity are eligible for a tax deduction on their current tax year. So, while you might not be earning any cash by donating your car, you might be able to prevent a lot of money from leaving your wallet and ending up in the hands of the IRS. And no one likes the IRS.

As for how to actually get a tax deduction on your car donation, you should consult the charity that’s accepting your car since they’ve probably already dealt with a lot of similar cases and can guide you better. You should also always consult your accountant or tax professional in this regard before you make the decision to donate your car.

You won’t have to face any towing or pick-up charges when donating your car. All you’ll need to do is fill out the paperwork from home, meet a couple of times with your charity of choice, and then just hand over the keys to them. No extra work or expenses required.

a towing vehicle with one car mounted and another attached to its rear The Cons of donating your car

You’ll be donating your car, not selling it

Let’s be real here, if your old car was totally worthless, there’d be no point in a charity taking it off your hands in the first place. Granted, it may not be worth a whole lot, being only a small fraction of what it was worth when you bought it, but it still has some value. And it’s that value you’d be sacrificing if you decided to donate your old car.

Of course, the entire point of donating your car IS to sacrifice your own personal gains to bring about a positive change in someone’s life, and we’re sure you were already aware of what it would cost you. After all, if you were just interested in your own personal benefit, you wouldn’t be reading this article in the first place, now would you?

Nevertheless, it’s still worth a reminder; selling off your old car, as opposed to donating it, will instantly put cash in your hands, and will allow you to cash in on an old, failing asset. It may not be a lot of money, and it may be harder to sell your old car too, but at the end of the day, you WILL walk off with an increase in your cash savings.

Donating your junk car involves a lot of paperwork

Donating your car may be a lot easier than selling it, but that doesn’t mean it’s a complete cakewalk either. The process is a lot more involved than just calling up your nearest charity and telling them to pick up the car whenever they feel like it. There’s a serious amount of paperwork involved, and you’ll need to complete all of it before you can give it away.

For starters, you’ll need to transfer the title of your car (the certificate of ownership) and provide the charity with accurate details about your car. Suppose you’ve lost the title (because it was ages ago that you last needed it, and these things tend to get misplaced over time). In that case, it’s your responsibility to get it renewed at your earliest convenience. You’ll also need to fill out and file all the appropriate tax forms, and you might also need to get your car appraised to get an accurate, fair market value.

Tax deductions from junk car donation can be tricky

Preparing the paperwork for simply donating your car is already tedious enough, but if you’re hoping to receive a tax deduction on your donation, the process becomes much more complicated. There’s a lot more you need to look out for, like additional tax rules, or how laws differ from state to state, and whether or not your donation is even eligible for a tax deduction in the first place. All these things require extra work, and then you’ll need to consult your accountant or a tax professional, which of course, costs time and money.

You also need to be careful about which charity you decide to donate your car to. Only charities registered under 501(c)3 are IRS-qualified to give you a tax deduction on your donation. So, you’ll have to be careful when selecting which charity to donate your junk car to; performing background checks on each potential candidate before you decide, which only means more work before you’re finally rid of your unwanted car.

And speaking of carefully selecting the right charity…

a cartoon character depicting a scammer requesting your password

Donating to junk car scammers

It’s disgusting really, how some people can even think of swindling good people just doing their part for the good of the community. And yet, that’s exactly what some fake charities do; they pose as real, trustworthy, non-profit organizations to lure in unsuspecting clients, and take off with their old car themselves instead of passing it on to someone in need, as was originally intended.

They do this by either fixing up your car and selling it to a used car dealership or scrapping it in the junkyard for cash, and in both cases, they keep all the profits for themselves. And like any good criminal, they do this very discreetly, so you’ll never be able to suspect anything if this happened with your car. They essentially steal your car, and the kicker here is that it was you who gave them the key in the first place.

This is why it’s important to perform background checks on any and all charities that you’re thinking of donating your car to. They need to have a clean record be trusted by the community before you can even consider giving them your car. However, checking all of this stuff requires even more work on your part, which only increases the workload on an already long and boring process.

All in all, donating your junk car can be a complicated process and a hectic experience, with little to no financial gain on your end as a result. But, for the potential positive impact it can bring about in someone’s life, and the added bonus of a tax deduction, it’s at least worth considering whenever you decide to get rid of your old car.

However, if you’d rather save yourself the stress and exposure that comes with donating your junk car, contact for help. We buy junk cars, trucks, vans, and RVs in any condition. We have a cash for cars program that ensures you get paid top dollar for your junk car. Contact us or request a free online quote for your junk car to get started.

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