Why Do Some Charities Make use of a Car Donation Center?

Many people believe when a charity runs on the car donation center to process their vehicle donations, it is a negative thing. They believe the guts will digest all the profits and the charity can get little from their donation. That’s certainly not true. All car donation centers are not alike and there are very good reasons charities use them.

Donating an automobile is a complex thing. The charity is required to obtain an automobile dealer’s license to be able to handle vehicle donations. An edge of a having a dealer’s license is that the charity does not have to title the car in their name and therefore won’t have to pay any title and sales tax fees on the donation. Every state has a unique requirement for handling a vehicle title and what should be completed with the license plates. A donation center will know the ins and outs of the necessity s for each state. The failure to properly handle the title and/or license plates may result in problems for the donor. Charities certainly want everything active in the car donation process to go smoothly for the donor. There is a particular degree of expertise that is needed for this. That expertise is expensive in the future by. Many charities certainly cannot afford this. Others simply prefer to make use of all their resources towards their mission.

It costs money to acquire a dealer’s license. Along with this, special insurance is required. That insurance is expensive. And, most states require the dealer to have a bond for $25,000 or more. That, of course, is an additional expense.

Another reason charities use a car donation center is to have the best price for donated cars. As a result of volume of vehicles, car donation centers can negotiate better charges for Cars Donated. They could get higher charges for vehicles regardless of whether the car visits the junk yard, used car dealer or auction facility. Car donation centers will also be able to negotiate better charges for the price of towing and auctioning a vehicle. These economies of scale benefit the charity and the donor. The amount the donor can claim as their tax deduction is set by the quantity the car is sold for. Smart car donation centers will place the very least bid on each car at auction so that the car won’t be sold for an unusually low amount on an off day. Again, the objective is to have the charity and the donor the utmost benefit from each donation. Car donation centers also provide the donor with the forms and other paperwork they need to be able to declare that tax deduction.

In return because of this service, the centers charge the charity a fee. Unscrupulous centers will charge the charity an appartment rate or a share of the sale price minus towing and auction fees. Both of these methods may result in the charity losing money on an automobile donation. Reputable centers charge a share of the sale price of the car. Under this approach, the car donation center pays the towing and auction fees and the charity cannot lose money on a donated car.

Karen Campese could be the Co-founder and CEO of Cars4Charities, a not for profit car donation center. They have over 1,000 respected charities that you can donate car to. Once you donate your car.

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