Should I Sell or Donate My Junk Car?

Both selling a junk car and donating it have pros and cons. Donating a car doesn’t give you the most value but you’re helping others, while selling a junk car gets you the most money. So which is best?  If you have a junk car and aren’t sure whether donating the car or selling it is best, we’ll help you make a decision by the end of the article.

Should You Donate Your Junk Car?

Donating cars doesn’t mean you will get anything in return. However, You might get tax benefits for your wanted vehicle based on the vehicle’s present quality and fair market value. TurboTax has declared that you can benefit from a tax deduction up to the amount your charity sells your unwanted car.

Some may prefer car donations to selling cars. They can look for charity and the vehicle donation program available. Donating a car should be done in a way that can be worthwhile. Sometimes a car might not be drivable on the road due to a massive accident, for which you can’t sell the car to a person or company expecting a reasonable amount. Instead, you can seek vehicle donation services from any company or charity.

However, when the car is too unsafe to drive, many charities might be unwilling to accept your donated vehicle. Many charitable organizations can receive donations of damaged or destroyed automobiles as long as the vehicles meet the fundamental standards of the organization.

Tax Deduction When Donating a Car

When you donate a car, you receive a tax deduction, but what is a tax deduction and how does it work?
Donating a car can reduce the amount of money you or your family have to pay in taxes as a way of the government thanking you for helping others out. The exact amount you save depends on a few things, like how much the car is worth and the tax laws. It’s not always better to donate a vehicle when comparing the selling option in terms of the most value you get out of it.
Below we discuss more about selling a junk car with an example of which is better.

Is It Better to Sell My Junk Car Instead?

Yes, it is generally better to sell your junk car instead of donating. The reason is simple, the value you get from selling your junk car is much higher than the tax deduction you would receive. If you really want to donate to a charity, you can take the money from the sale of your car and donate the proceeds directly to the charity of your choice.

Let’s look at the following example.

You have a 2005 Honda Civic you are looking to sell. Online companies will generally pay around $500 for this vehicle.
If you decided to donate the vehicle and let’s say the company that you donated it was able to sell it for $1,000. That means you can deduct $1,000 from your tax returns. With an average income tax bracket of 30% (depends on your individual tax bracket) that means that $1,000 deduction nets you $300 while the sale of the vehicle would get you $500.

In the example above, it’s clear that selling your junk car would get you more money.

Process of Selling a Junk Car vs. Donating?

In both cases of selling vs donating a junk car, the process is the same. You call or fill out a form, vehicle is scheduled for pick-up and then your car is picked up. The difference in these 2 cases is that when selling a car, you receive a quote over the phone for your car and at time of pick-up, you are paid on the spot. When donating, the car is picked up but no payment is given.

Overall, the process of selling or donating a car is very simple and can be all done within 24-48 hours. Once you donate your vehicle, you need to hold onto the receipt for tax filing purposes at the end of the year.

If you decide to sell your junk car, find out the value of your junk car in under 2 minutes by filling out online form or giving us a call today.