Car Donation Fair Market Value

Finding the fair market value of your vehicle:
Before deciding whether or not it is worth donating a car to a charity, it is important to know how much the fair market value of that car is. But what exactly is fair market value? This is the value of the car which both the buyer and seller agree upon in order for a transaction to take place. Bearing this in mind, it should be the financial objective of anyone looking to sell a car to be sold at a going rate of at least fair market value.

For a fairly accurate assessment of the value of your car, take a look at the Blue Book value. The value of your car found in these listings is considered to be a fair approximation of fair market value.

While going through the process of determining an estimate, you will be required to declare data about the condition of your vehicle. Be honest when filling out this assessment, as very minor damage to a vehicle can severely effect the condition rating and charities will be able to make the same assessment which you have estimated, upon inspection of the vehicle. Also note that even if your car received a “Poor” assessment means the vehicle is capable of driving without any external assistance. Any rating less than “Poor” will most likely result in receiving a meager reimbursement that the vehicle will receive through a wholesale auction, which can be a minor fraction of the car’s fair market value.

It is important to note that the charity you have opted to donate your vehicle to will most likely only receive some 25-50% of the value after considering costs of towing, as this will be the recoverable value from the usable parts and materials. To avoid this problem, you can simply opt to donate to a charity that will use your car as method of transportation, rather than to sell for wholesale value at auction.

That being said, once you have determined the value of your vehicle, start thinking of what type of charity you would like to donate to, and bear in mind that your tax receipt and amount deductible from your tax bill will be dependent on what use the charity makes of your vehicle. This site provides some nice alternatives to look for that can relate to a higher deduction, so read up on the matter and be mindful of exactly where your donation is going, and by what means.

The next section will provide more information on the details of reducing your tax bill through claiming your donation.

Step 3: Finding the Right Charity

Topics: car donation