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Should I Donate or Sell my Junk Car?
Many people who want to get rid of a junk car face the same dilemma: donate or sell? Selling puts some extra cash in your pocket, but donating makes you feel good. Selling offers immediate cash, while the financial benefits of donating come later in the form of tax write-offs.
Before you decide, it helps to have an understanding of how both processes work. Selling is pretty straightforward, but donating is more complicated than you might think. There’s no wrong decision, as long as you’re informed.
Selling Your Clunker
Selling your car is as easy as answering a few questions online and waiting for someone to pick up the car and drop off the check. Fill out a form with some basic information about your car and get an instant quote. If you like the price, agree to the deal and arrange to have the car picked up. In many cases, the car can be picked up the same day and you’ll be handed cash or a check on the spot.
The alternative is to call your local junkyard. Most junkyards will pay for old cars, and many also pick up. However, some charge for towing. If your car isn’t worth much, the towing charge may negate any potential profits. (To make sure you’re getting the best price, check the Kelley Blue Book or Edmunds value before agreeing to a sale. But keep in mind that their figures do not always translate to real-world prices.)
The bottom line in deciding to sell or donate is, ‘What can I afford?’ If you’re struggling to pay bills and support your family, or you could really use the extra cash, don’t feel bad about selling. You can always donate your valuable time to local charities instead.
Donating the Car
There’s no question that donating is a kind gesture. Just make sure you know who the donation is actually benefiting. Beware of for-profit organizations that sell the donated vehicles and keep part of the profits, donating only a portion to charity. If you’ve seen a commercial or billboard encouraging you to donate an old car, that’s most likely the work of a for-profit organization.
To make sure your donation actually helps those in need, donate the car directly to your favorite local charity, or at least do some background research on the organization or nonprofit before handing over the car. Check the organization’s record with the Better Business Bureau to start.
Also, don’t forget that the IRS will want to see evidence of how much the charity got for your car if the sale price was more than $500. Request this paperwork from the charity and keep it on file in case you get audited. Non-cash donations are one of the major triggers for an IRS audit.
You could always donate the car to charity and get the tax write off. Most charities are also willing to pick up donated vehicles. Good deed as it may be, though, this option is a little more complicated than the previous two, though not rocket science.
By: Ryan Maguire