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.
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