Helpful Link of the Week #4

The nice thing about Donate Car USA is that there’s nothing left to the imagination; the name says it all.

What it doesn’t say, and you might not know, is that Donate Car USA supports more than 400 different charities; that’s right, more than 400.  Charities that offer a helping hand and support to all varieties of people and organizations in need.  And they do it with your help, and only with your help.

On the other hand, they also provide a valuable service to you, if you stop to think about it.  That junky car, used and unnecessary now, just taking up space in your garage or driveway (or worse, maybe even your yard), is definitely not doing you any favors, and certainly no good, just lying around the house, its best years behind it.

What better way to get rid of something just taking up space, and at the same time doing something good, something that can make a difference?

It’s so easy, too.  Donate Car USA does all the work; all you have to do is make the pledge they will handle the rest.  Donate Car USA takes your information and handles all the processing, from transferring the title to arranging to have your vehicle picked up, delivered and auctioned off, with the proceeds going toward charity.

Inside the Auto Auction: Part 1

One of the ways that charities process donated vehicles is by selling them to licensed dealers at wholesale auctions across the country. The proceeds from each vehicle sale are forwarded to the donor’s charity of choice. The donor then gets the ability to deduct the sale price of the vehicle from their taxes.

These vehicles are not just donated cars. Actually, the majority of vehicles processed through the auction house are former lease cars, former utility cars, bank repossessions, recreational vehicles, dealer sales, and insurance loss cars. The insurance loss vehicles, for example, consist of cars that were involved in some sort of accident, and that the owners chose to relinquish rather than repair. The insurance company then sells the vehicle to licensed dealers, who in turn either fix them for resale or part them out.

The auction house does not ever technically own these vehicles. They are merely facilitating the sale of them. But they do so by attracting a wide range of buyers that come to buy the vehicles in their huge auction garage. The auction house makes a profit by charging fees for buying and selling the vehicles.

Inside the Auto Auction: Part 2

All of the vehicles are stored outdoors in a massive lot. They are all inventoried and numbered. Chalk marks on the windshield denote the stock number and mileage.

The auction itself takes place in a massive indoor garage with multiple “lanes” lettered in alphabetical order. There are garage doors at each end of the vehicle lanes for the vehicles to drive through. Inside, each lane is devoted to several categories of vehicles. One or more Ocean State employees are assigned to oversee each lane.

Before the sale, attendants prep the vehicles and line them up to the garage door in their respective lanes. Typically a preparation will consist of washing and detailing the vehicle, charging the battery or other quick minor adjustments to get the vehicles ready to go.

Inside the Auto Auction: Part 3

When the auction starts, the vehicles up for sale are driven into the garage. Cars that aren’t running are pushed in from behind by padded trucks. The vehicles then pause for brief buyer inspection. Prospective buyers have a chance to look the car over, examine any body flaws, and open the doors and look inside the interior. Diagnostic tools are not allowed. But there is really no point to that at a dealer-only auction. These vehicles are sold as-is, so it is implied they may have problems and the dealers are fully aware and prepared. The big picture is what influences buyers’ decisions: year, make, model mileage and condition. Most important is whether the vehicle runs and drive or not. The auction does certify and stand behind certain vehicles that are running with no major issues, so if the buyer does buy a vehicle that seems misrepresented, they can return it. But most of the time, that’s not an issue. These buyers know exactly what they want.


Bidding starts right away and only lasts a couple of minutes. Each lane has a tall bidding podium where the announcer is seated to accept bids. Buyers will subtly indicate they want to place a bid, usually with a non-verbal form of body communication: a raised hand, an arm motion, a nod of their head. The highest bidder wins. 

Inside the Auto Auction: Part 4

Not all cars are sold automatically, however. If there is an especially valuable or high-interest vehicle, off-site sellers will most likely review the high bid later and decide to accept or not. If the bid is approved on site, and if winners can provide payment on site and have temporary license plates to put on the vehicle, they can drive the cars home the same day.

Once the bidding is completed, the vehicle is then driven out the other end of the garage and back into the lot. Workers on deck mop the lane after the vehicles drive through to keep the area clean and tidy. The next car is then driven through, and the whole process starts over again, until the auction ends for that day. Typical auctions last a few hours.

So there you have it: an exclusive look into the hectic, fast-paced world of wholesale auto auctions, where your generous vehicle donation is processed. Your donated car is just one of many vehicles, but it’s still given special treatment and a chance to raise as much money as possible for a great cause.

Another Infographic

Here is another interesting infographic about charity relief funds in the US and FEMA. 

[click this link for the large version of the image]

Charitable Giving Infographic

Here's a great infographic about charitable giving in the US:

[here is the link for the large version]

The Tax Benefits of Donating a Car: Part 1

You've seen the ads: "Donate your car and get a tax break." Technically, that's true.

But some people who give away an old auto might find their tax break smaller than they expected. And a few donors, thanks to the intricacies of vehicle gift guidelines, might be able to boost their deduction amounts.

Giving away a clunker to a charity was once straightforward. You could claim the old car's fair market value, that is, the amount a willing buyer would pay a willing seller for the product. Typically, you'd refer to auto valuation services, such as the Kelley Blue Book, to get an idea of the donated car's value, give it to your favorite nonprofit and then drive off with a tax break equal to that valuation amount. No more.

Because some taxpayers got greedy, claiming much more than their old autos were worth, lawmakers tightened the rules on how much you can write off for a vehicle donation. Now the precise tax break depends on the donor's claimed value of the gift and how the charity uses the vehicle.

"This puts taxpayers in the unusual situation of not knowing the size of their deduction when they make the donation," says Bob D. Scharin, senior tax analyst from the Tax & Accounting business of Thomson Reuters.

$500 limit

In most instances, a taxpayer must take into account a $500 threshold on vehicular gifts. This value amount applies to autos, boats and even airplanes. When the donated vehicle's value (based on credible fair market value analyses) exceeds that amount, claiming the deduction gets more complicated.

This valuation ceiling comes into play when a charity sells a donated vehicle. In this case, just how much a taxpayer can deduct depends on the amount the sale nets.

For example, you donate your old station wagon that's worth $1,000. Under the old rules, that would be the amount you could deduct. But now, if the charity turns around and sells your donation for $800, your deduction is limited to the lower sales price.

The charity must give you substantiation of the Internal Revenue Service-allowed donation amount within 30 days of when you turn your car over to the charity or, if the group sells the auto, within 30 days of the vehicle's sale.

By now, you should have gotten word from the charity as to what it did with your old vehicle. If you haven't heard from the charity, give it a call and ask that it send, or resend, you the donation specifics.

Plus, you now must include a copy of the acknowledgement with your tax return. Previously, such receipts were generally only kept by the taxpayer in case the IRS questioned a claimed deduction.

Helpful Link of the Week #3

Here's a helpful guide published by "Kars4Kids" on car donation!

Kars4Kids

Your Role in the Car Donation Process

You have the biggest impact in the whole process of car donation. Without you there would be no process of car donation. Donating your car means that you get your car taken off your hands and given to those who are less fortunate, and on top of all of that is you get a fat tax deduction, so you benefit too! These tax deductions can vary widely, but we’ll discuss that in another post.

Car Donation Tips Video

Here's a helpful video about car donation

Helpful Link of the Week #2

This week's helpful link is:


Donate a Car 2 Charity


"Activated Ministries is a nonprofit Christian ministry working with dedicated missionaries and human service agencies to meet the spiritual and material needs of people from all walks of life, regardless of age, gender, race, faith or nationality. Our goal is to make a difference in a world where today’s busy schedules often crowd out the things that matter the most—love for God, love for family and love for others."

Tips for Donating Your Car

Here are some more tips for the whole process of donating your car!

• Make sure the charity is eligible to receive tax deductible contributions. Ask for a copy for your records of the organization’s IRS letter of determination which verifies its tax exempt status.
• Be sure that you get a receipt from the charity for your car donation.
• Be aware that non-cash donations are one of the most common triggers to an audit by the IRS, so you’ll want to document the value of the car and keep records of it.
• If the car is worth more than $500, the donor must complete Section A of IRS Form 8283 and attach it to their tax return. Donors are required to file with his/her tax return a written acknowledgement from the charity. If the charity sells the car, the charity must provide the donor with a certification that the car was sold at "arms length" between unrelated parties and the sale price of the car within 30 days. In this case, the donor's tax deductions will be limited to the total amount the charity sold the car for. If the charity does not sell the car, it must provide the donor with a receipt within 30 days of the sale. The charity may also be required to provide certification to the donor stating how it plans to use or improve the car and stating that it promises not to sell or transfer the car. Penalties are imposed on charities that provide fraudulent acknowledgements to donors.
• If the car is worth $5,000 or more, an independent appraisal is necessary. The donor must also fill out Section B of IRS Form 8283. For cars worth less than $5,000, use the Kelley Blue Book, the Hearst Black Book, or a guide from the National Auto Dealers Association (NADA) to determine the market value. Make sure you use the correct figure for the date, mileage, and condition of your car. Picking the highest figure for your car model and year without taking into account other factors may not pass muster with the IRS.
• Take pictures of the car and save receipts for new tires or other upgrades to verify its value.
• Remember, it is the donor, not the charity, who is obligated to value the car and who will pay the penalties if an IRS challenge finds your figure inaccurate.

Important Car Donor Facts Part 2: FAQs

Warning: The formatting of this article is messed up and we cannot change it, we apologize for it.

How will the new tax law changes effect my tax deduction?

Vehicle donors are still eligible for a tax deduction on their itemized federal tax return! Donors are eligible for a deduction of up to $500 or the amount their vehicle sells for over $500. Many charities are now selling many donated vehicles at public auctions to increase the selling price thus maximizing the tax deduction for donors.

How will I know how much my tax deduction will be?

If the value of your donated vehicle is greater than $500, you will be notified of the selling price within 30 days of its sale.

What types of vehicles are accepted?

Almost all vehicles are accepted, whether running or not! 

Are there other restrictions?

Yes. You must have either a title or transferable registration for the vehicle and the keys for it. In addition, your vehicle cannot have any parts missing, including the battery and all of the tires have to be inflated. Also, your vehicle must be in a place where a large tow truck can easily get to it.

What if I cannot find the title?

If you cannot locate your title, please obtain a duplicate title from your local Department of Motor Vehicles.

Do I have to mail my title?

Yes. Your title needs to be in the hands of the charity you are donating to.

How long will it take for my car to be picked up?

Generally, it takes 2-5 business days from the date we receive your title for the vehicle to be picked up. The towing service will call you in advance to make the arrangements.

Do I need to be present for the pickup?

If your vehicle is parked on the street, someone will need to be present when the towing service arrives. You do not have to be present if your car is parked in your driveway and it is in a position where a large tow truck can easily get to it. In this case, you will need to tell the towing service where you are leaving the keys. Do not send the keys with your title!

Important Car Donor Facts Part 1: Taxes

If you're visiting this blog, you might be wondering "what are some facts about donating your car to charity?" Luckily, we're here to tell you all about donating your car to charity.Car donation is mutually beneficial to all parties involved, the charity gets money to help the needy and the needy have a means of transportation, and the best part of all of it is that the IRS will give you a nice tax reduction, which is what we'll be focusing in this part!

The donated benefit from the car to the charity can vary considerably. In some cases, the full amount of the donation goes to the organization if the charity sells the car itself or uses the vehicle to help fulfill some program services need, for example, delivering meals to people. But if a third-party broker is involved, the charity may receive only a tiny part of the resale price of the car (sometimes even less than 20%) or it may receive an even smaller portion of what is left after all the expenses have been paid by the broker, which can result in even smaller amounts going to the cause.


If you are claiming a car donation of $500 or above, you will need to complete and attach IRS Form 8283 to your tax return. For your records, you also will need proof that you made a charitable gift. The best evidence is to transfer the title of the car to the charity and keep a copy of this document.


Why all the fuss though? For some households, a car donation may be the single largest charitable gift made during the year, or ever. This is all the more reason to make sure that the donation is being used for the greatest charitable benefit and that you can take full advantage of any potential tax deduction. 


Here's a handy donation checklist:

• Verify that the recipient organization is tax exempt as a charity.
• Make sure the title of the car is transferred to the charity's name and keep a copy of this record.
• Find out how the charity financially benefits from the resale of the car.
• For tax records, take a photo of the car and keep copies of current classified ads or guide value estimates for similar vehicles. (For more deductibility information, get a copy of IRS Publication 561, Determining the Value of Donated Property.)
• If the car is worth more than $5,000, get a written professional appraisal.
• Find out if the charity is properly registered with the government agency in your state that regulates charities (usually a division of the state’s office of the attorney general).

Here's the official IRS document concerning car donations in the US:

irs.gov/car-donations

Helpful Link of the Week #1

Here's this weeks helpful link:


Cars 4 Causes


"Cars 4 Causes is a non-profit organization that supports youth education. We are America's 1st vehicle donation charity. We’re experts at turning your vehicle donations into cash for charitable causes. Our staff is friendly, knowledgeable and happy to answer any questions you have about your car donation."