Sometimes it is good to let a professional help you out.  If you have too much to do in your life already you could use the assistance.  A third party service organization or a facilitating service can be chosen to mange an auto donation.  Many charities also use a third party organization to mange their auto donations for the same reason you might.

There will be an inherent expense and time consumption involved in any auto donation.  This makes many people want to use a professional for help.  For many consumers it is a matter of having bought a new car and now wanting the old one gone as fast as possible.

Of course, there are financial and charitable benefits to conducting such transactions yourself, but all auto donations are good ones as far as receiving charities are concerned.  Also, if using a service to manage your auto donations makes donation that much more likely, then such services serve a valid purpose.  As of 2007, nearly 70% of legitimate charities (determined to be non-profit by the IRS) used third party agencies to manage their auto donations, though a similar amount did take their own inquiry calls.

As common as the practice is, there are some things you want to take into consideration when choosing a service to manage your auto donations for you.  For starters, you want to make sure the third party management of auto donations actually benefits real charities.  This is often accomplished by calling the state Attorney General’s office or your state’s Secretary of State.

A large majority of states require third party agencies that handle auto donations to register with the state.  If the company you are inquiring about is not on the rolls but is advertising their services in the state, an investigation will likely have to be undertaken.  Feel free to ask for a copy of the legitimate list if you are confused.  Many states carry this information online.

There are many types of charities that can benefit from auto donations.  In addition to the typical non-profit organizations as recognized by the IRS, schools, local or state governments, childcare organizations, veterans groups, and the federal government itself are all eligible.  Not included as valid targets of auto donations are for-profit support groups, political groups or candidates, social clubs, co-ops, labor or agricultural groups, and any social group that isn’t covered by non-profit exemption.

Once you have chosen a charity and third party agent for auto donations, you can get down to the business of actually sending the car off.  When inquiring about your vehicle a determination will be made as to whether it is worth the effort of picking it up.  Though some charities will accept any vehicle, others are pickier about what they will or won’t take, since some donations may actually cost them money.  Those who do take all auto donations usually do so in an effort to generally increase their donation base.

Even if the auto you are donating does run under its own power, it will almost always be picked up by a tow truck for liability reasons.  Whether the charity in question will be using the car as is, will repair it for sale or sell it directly on the wholesale market depends upon their needs and how quickly the turnaround on auto donations are expected.

Third party auto donation agencies usually prefer to sell vehicles at wholesale auctions.  This will usually bring in less cash for your auto than you could have gotten had you sold the auto yourself.  But this is only important if you think your auto is worth over $5000.  If it is worth over $5000 you will have to get a receipt for the actually value of the car.  If it’s worth less than $5000 the fair market value will be estimated.

As for your allowable charitable deduction, if your auto is worth less than what you paid for it, a third party organization will be your best choice for managing your auto donation, as they will handle it quicker and more efficiently than you can.  If your auto donation is worth a higher value, such as $5000, you should talk to the charity you are donating to and discuss selling the auto outright and then donating the resultant cash directly.

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Tags: auto donation, vehicle donation

This entry was posted on Tuesday, July 29th, 2008 at 12:30 am and is filed under Vehicle Donation Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.