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How to Donate a Car in California


How to Donate a Car:

Donating a Car is FAST and EASY.

But there are things you need to look out for when donating! It is possible at times for us to get you as much as 3 times the tax deduction because we take the time to do everything we can for you, and for the charity.

If you get 3 times the tax deduction, this means the charity likely got 3 times the profit on your car! Imagine that your car was upraised at $1000.00 because it didn’t start. Depending on what is wrong, Harold’s Car Donation Service will fix it so that it’s running properly, bringing the value far higher than the original amount.

Before we go into the legalities of donating a car, we’d like to make sure you have all of the data on how WE handle the process so that the decision is a bit easier for you. So below is an exact list of every step that happens when you donate a car to a charity and we handle the donation:

Pre-donation steps:

  • Charity promotes by various ways to the public
  • Donor contacts the charity and contact info is emailed to Harold’s Car Donation Service
  • Harold’s Car Donation Service calls the donor to get info: kind of car, condition of both mechanical and physical, approximate odometer, do they have title and who is listed as registered owners
  • We acquire the donor’s address and best phone number
  • Donor gives us the VIN and plate numbers which I verify for correctness on the CA DMV web site
  • If no title we find out if a finance company is still shown on DMV records- sometimes we need to obtain a lein satisfied from the lender
  • We advise the donor to search the vehicle carefully to ensure no valuables are forgotten, such  as garage door openers, etc.

Donated vehicle pick-up:

  • Towing is free to the donor.
  • We normally have the car/truck/van/boat/RV picked up the next day or two, or sometimes the same day depending on donor availability
  • We instruct donor on filling out the Notice of Transfer and Release of Liability which they are required by law to submit within 5 days. This tells
    the DMV they are no longer responsible for the car and which charity it has been donated to. They can also file this directly on the DMV web site which
    ensures it arrives at the DMV and which we can help with if the donor wishes.  This protects the donor from any liability for the vehicle after pickup.
  • We arrange to have a towing company call them to schedule pickup of vehicle and the title. Depending on the vehicle destination we occasionally have the donor keep
    the title until the car is sold, then mail it to auction.
  • If no title, the towing company has the registered owner(s) sign the DMV application forms which enables the auction or dismantler to get a replacement title.

Donated vehicle repair, reconditioning or dismantling:

  • After vehicle is picked up, we email the vehicle info and donor info and pickup date to the preferred charity.
  • Harold’s Car Donation Service having over 25 years in the car repair business, each car is evaluated to determine the best solution for maximum profit. Some vehicles get repaired, most cars will get fully detailed which greatly increases eye appeal and normally drives bidding prices higher. This not only brings more money to the charity but gives the donor a larger tax deduction as well.
  • If a vehicle is in need of repair, we determine if it is cost effect to have it done. We can sometimes triple a selling price by having a car repaired, creating a win-win-win situation for the buyer, donor and charity. If repairs significantly increase the value of a car, the donor is then allowed fair market value to be determined by the donor, which is allowed by the IRS.
  • If no significant repairs are done, the donor’s tax deduction is the actual selling price of the vehicle.
  • If vehicle is totaled or scrap, it is sent to a dismantler to be taken apart and disposed of in an eco-friendly manner
  • If a car sells for less than $500, donor is allowed fair market value to be determined by donor, but not to exceed $500.

After vehicle is auctioned:

  • After the vehicle is sold, Harold’s Car Donation Service will notify the charity of the selling date and price.
  • Once we receive payment from the auction house, we contact the donor to obtain additional information needed which will allow us to complete IRS Form 1098-C, which is required on vehicles selling for more than $500.
  • Within 5 days of receiving payment, I send payment to charity

After donation is complete:

  • Copies are sent to donor to file with their federal tax return. This is a requirement if they want to claim a deduction of more than $500. Which of course the do!

    The IRS has clamped down on how much you can write off on donated cars. No longer can you submit a vehicle’s full value. Now, instead, you can only claim the amount for which it is sold. For example, if your vehicle has a Blue Book value of $1,600, but the charity only sells it for $725, you must submit the lower deduction.

The DMV has a page on their website to help instruct the donor on how to donate a car in the state of California

The quote on the right has been taken from this page.

It is for this very reason  why Harold’s Car Donation Service exists, when you have a car with a blue book value of X amount, but due to vehicle issues it would not sell for that amount, you want it to go through our service. Our team of seasoned mechanics can often diagnose & repair the vehicle before auction, getting the charity more money for their cause and the donor a higher tax write than previously possible. This is perfectly legal per IRS guidelines.

 

Page 10 of the PDF (page 8 on the document pages) goes over the definitions of vehicle repairs and how they can increase the donors tax deductible amount, and the amount gained by the charity.

Page 4 of the PDF (page 2 on the document pages) goes over how to determine the amount you can deduct on your donated car.


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