In neighborhoods all over America, non-working cars are parked languishing in driveways. In fact, there may even be one in your driveway right now. When it comes to getting rid of that eyesore, does it make more sense to donate a car to charity or simply sell it for scrap?
There are several things to consider while making deciding what to do with that lovely lawn ornament so beloved by your neighbors. The pros and cons associated with donation vs. salvage are listed below. Weighing these pros and cons should assist you in making your decision.
The Benefits of Donating a Junk Car
Most charities will come and remove your car for free. Imagine how delighted your wife will be when she comes home from shopping some afternoon to find that the clunker in front of your house has magically disappeared.
Depending on the charity, the donation of your car may qualify you for a tax deduction. To sweeten the deal, some charities offer incentives such as gift cards or free trips in exchange for your donation. Be advised, while these incentives are attractive, they may affect the amount of deduction you can take from your taxes. The IRS requires that the retail value of the gift be subtracted from the amount of donation and it is this new total that is eligible for deduction. However, even without the incentives of a thank-you gift or tax deduction, donating your car can help a local charity and that is never a bad thing.
The Benefits of Salvaging a Junk Car
As with donating your car, a junkyard will also come and remove your car for free. They can certainly afford to do so as the price they offer will be substantially lower than what the remaining working parts will bring in the open market. If you are looking for a way to earn a few dollars, this may be acceptable to you. On the other hand, this strategy does nothing to assist a worthy cause in your community.
A Way to Maximize Donation Benefits for Everyone
An alternate approach you may wish to employ would be the following: Select a charity that you would like to support. Then, sell the car yourself for scrap, and donate the proceeds to the charity directly. Proceeding with the transaction in this manner makes for a win-win-win. The junkyard gets to profit from the useful parts remaining in your car. By making a cash donation, the charity will net a larger donation as they do not have to bear the expense of collecting your car. This means that more of your dollars can go to support the cause of the charity and not its overhead. In this scenario, the third win goes to you. A cash donation is often much simpler to itemize on your tax return, making the receipt of your deduction an easier proposition. Depending on the charity, you may find yourself with a new gift card in your wallet or taking yourself on a little trip. You will also have the satisfaction of knowing that you helped dollars remain in your community where they can do the most good.