How Car Donation Fundraising Works

Taking donations of automobiles can work for many different types of charitable organizations, no matter how small or large.

Before you eliminate this one from your stable of fundraising ideas, realize that you don't have to have a large automotive facility, parking lot or mechanic's garage to do it.

What Kind of Cars?

When you are asking for car donations, you'll get all kinds of offers. You may be offered a perfectly good second-hand car in fine mechanical condition, or you may get offered an unusable wreck. However, even that unusable wreck can bring you some funds, so don't discount it right away.

The price of scrap metal is at an all-time high. It would not be unusual to get $150 for a junk car at a scrapyard. Even if you have to spend $50 or $75 to tow the car there, you still turn a profit on the donation. And you'll do even better if you happen to know a tow truck driver who is sympathetic to your fundraising cause.

Don't limit your requests to functioning automobiles. Although these are more valuable and have more potential uses, the market is full of junk cars, and it will be easier to get someone to donate a car that they have no use for. In fact, most people would be quite happy to let you take that rusted, non-running hulk off their hands, regardless of the nature of your organization!

Running automobiles, on the other hand, can serve other purposes. They can of course, be sold to raise funds, or they can be used by your organization–or donated to needy people who need a way to get back and forth to work.

Most of the cars that are donated however, are not of high quality, and the primary model that most charities use is to take the cars as donations, and then sell them to raise funds rather than use them directly.

Selling at Auction

It may occur to you to try to sell the donated cars directly, and therefore get a better price for them, but that course of action is a lot more difficult than you may think. First of all, you have to have a place to store the cars, and if you have more than one or two at a time, you may have to deal with local and state regulations pertaining to running a car lot.

Some communities have strict regulations in this regard, and placing a dozen used cars in front of your facility with “for sale” signs on them may put you on the wrong side of local statutes.

A common way to do this is to work through an agent who specializes in moving donated cars, who will arrange for everything. The agent will arrange for towing if necessary, cleaning, and will arrange to sell the car at a wholesale auction.

Of course, when you are working with an agent, there is a fee involved, and you may get 50 percent of the proceeds when it's all done.

Wholesale prices for automobiles is surprisingly low. You may get $400 or $500 for what looks like a very nice and serviceable used car, and then half of that will go to fees and the agent. Nonetheless, if you have a good flow of car donations, it can be an excellent way to bring funds into your organization.

The Legalities

Selling a car is a little more complicated than selling a box of cookies at a bake sale. First of all, there is the issue of tax deductibility.

The donor will usually want to use the donation as a tax deduction, and they are entitled to do so. In the past, the deduction was equal to the market value of the automobile, but newer laws have been passed that say that the donor is only allowed to take a deduction equal to the actual sales price of the vehicle.

So, if you sell a vehicle at a wholesale auction for $400, that's the amount the donor can deduct. Again, there's a big difference. A vehicle selling wholesale for $400 may actual have a market value of many times that.

Before you start down the car donation path, you will also have to familiarize yourself with the ownership transfer regulations of your particular state. Pay a visit to the motor vehicles department in your community to make sure you're up to date on what paperwork is required for transfer of ownership.

Comments

  1. Bobby harris says:

    Hello my name is Bobby and I am speaking here of my own words to try to reach out to people about a need I have now.i am in need to find a vehicle preferably a SUV this is because one I had was stolen by a girl who claimed she needed to borrow it for one day to get her 4 yr old son and took off with it and never came back she left me getting sick from walking so much and breathing problem while walking out there I was breathing heavy and rapid and carrying heavy Things home no body would offer a ride I can’t afford to buy another one this SUV was my father’s when he passed away a few years ago was given to me.and so far I cannot get a loan because of retirement income is too low does not meet the requirements for the loan for a vehicle I have bruised muscle in legs feet and hip from walking things are like 5 to 6 moles away too far to walk from out in the rural area this town doesn’t have any transportation needs no taxis either.i am trying to do a fundraising to raise the money to get another vehicle.for all I have done was almost impossible car lots were very unfriendly and say nah we do not wanna work with people whose retirement income is low and not over $5,000 at least or something to interest Them I am hurting and desperate for a vehicle to help me get around in it I can afford gas oil fluid That it needs and other things only to purchase the vehicle is the only problem and solution I need if there is anyone that would be willing to help out or help with anything I can always be contacted via email address I have it has been very hard to raise money for it .. I be gratefully thankful for anything at the present time thank you for hearing and listening to my current situation peace and blessings to you all.

  2. Jamie says:

    Hi there

    I drive a 2010 BMW 323i its got high mielage on the clock and it is giving me a bunch of problems which I can’t afford as i am a 19 year old girl, i have had my car for almost 3 years now and would love to afford to buy a new one, i have some cash saved and needing R250,000 more to be saved for a new car… I’d appreciate donations with alll my heart!

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