Donating a Car vs. Selling to an Auto Salvage Yard: 5 Things to Consider
If you have an old car that can't find a traditional buyer, you still have options. No matter what condition your vehicle is in, you can probably find a charity or a local auto salvage yard that will take it off your hands.
When deciding whether to donate your car or sell it for scrap, there are a few things you should keep in mind:
1. Check the Charity Write-Off
If you donate your car, you will receive a tax write-off. The amount of the write-off will depend on the type of vehicle, the condition, the charity and current tax laws.
Charity Watch suggests consumers research the organization to which they are donating. Not every nonprofit is eligible to offer tax deductions. You can ask to see its IRS letter of determination. Make sure you get a receipt.
2. Calculate the Value of a Salvaged Car
Before you contact a local auto salvage yard, you should figure out how much your vehicle is worth. Cars Direct advises consumers to look up the blue book value of their vehicle and deduct 50 percent of the retail value when pricing it for scrap. This is just a starting point, however. Depending on the quality of your car, it could be 70 or 80 percent less.
Next, consult the estimated value provided by your insurance company. Adding retail value to this number, then dividing it by two, will provide you with the market value. Finally, multiply the market value by the percentage used by the insurance company. This should leave you with the value of your car.
While this might not work for every vehicle, it can give you a general idea of how much money you can make scrapping your car or how much the charity could sell it for.
3. Ask the Charity About its Plans.
How the charity puts the car to use will affect your tax deduction.
If the vehicle is still operational, you want to find an organization that plans to use it, or donate it to a needy person who will drive it, because that means you can write-off the full fair-market value. If the charity sells the car at auction or for scrap itself, you can only write off a percentage of the sale depending on your tax bracket.
4. Parting the Car Yourself is More Profitable
If you have some mechanical skill, you can make more money by removing valuable pieces from a junk vehicle yourself.
You might find buyers for individual parts of your car and then sell the rest to your local junkyard. CNA Finance indicates consumers can get a good price for a car's original catalytic converter, which reduces toxic pollutants from exhaust gas. Check the condition of yours and see if you can remove it on your own.
5. Both Will do the Work for You
If you are just sick of the sight of the vehicle sitting on your property, both charities and local auto salvage services will tow it away hassle-free.
If you're more concerned with getting rid of your old car than getting the maximum possible value, you don't have to do any research beforehand. Salvage yards will quote you a price over the phone or in person. Most junkyard services will give you cash on the spot.