Car Donation – What is it?

Car donation is the practice of giving away used automobiles to charity organizations. In the U.S., charitable donations provide a tax benefit.  For values less than $500, the value of the tax deduction comes from the donor’s own estimate of the car’s value, even if the charity receives less money from actually selling the car. Deductions for donations over this amount are limited to the sale amount of the vehicle (usually at an auction).  Some critics have claimed that this is essentially a tax shelter.  However, non-profit organizations in the US have come to rely increasingly upon the revenue from car donations. This type of donation has become increasingly widespread in the U.S.