New Donation Laws

Information on Car Donation Laws You Should Know

Over the years, many people have received tax deductions, sometimes quite large, because they donated their car to a charity.

Before 2005, people received a tax break for the Kelley Blue Book value of the car. This means that if someone had a car that was worth $2,400 per Kelley Blue Book, they would receive a tax deduction of $2,400, even if the charity they donated it to only received $500 when the car was sold at auction because the car had a bad motor. The donator would receive a tax deduction for a $2,400 donation, even though they only donated a vehicle worth $500.

The IRS noticed that this was going on, so they decided to change the law so people receive a tax deduction for the actual value of the car.

Now, if someone donates a car to a charity, they would receive a tax deduction only for the amount of money the car sells for in an auction. This is often much lower than the Kelley Blue Book price.

This means that currently if someone donates a car that is valued at $2,400 per the Kelley Blue Book price, which sells for $500 in an auction, the tax deduction they would receive would be $500.

Let’s imagine a person who is in the 30% tax bracket. He has a car that is valued at $3000 in the Kelley Blue Book, but it has a bad motor and some light body damage. Because of the problems with the car, it would sell at auction for only $700. Before the law change of 2005, this person would have saved $900.

Today, he would save only $210. Instead of donating his car and saving $210 on taxes, he could sell the car and receive $700 cash.

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Sell or Donate?

The rules on donating cars have changed. Now you can only deduct what the charity gets for the vehicle. You have the option to sell your car to whether it’s still running or not. We come to you and buy your car, and the deal can be done in just a few hours.

Sell Your Car Fast at

We pride ourselves on our fast, friendly and efficient service. If you want to donate your car, you should do so, but let’s be clear—you will longer be able to deduct the full value. We are ready to hear from you and buy your car, and one of our team members will come prepared with all the required paperwork, payment in hand, and we will tow your car away for free. Problem solved.

Call us today!