At least 18 charities in the Washington area accept donations of used vehicles, a manner of contributing that has been attractive to many car owners because of the substantial tax deductions such gifts have allowed.
While an owner gets to deduct the appropriate Kelley Blue Book value of the donated car or truck, at least until Dec. 31, most of the charities realize only a fraction of that figure, anywhere from a few hundred dollars to about $1,000. Generally, the cars are picked up, transported and auctioned off by middlemen such as Charity Vehicle Systems Inc. of Fairfax and Copart Auto Auctions Inc. of Waldorf. The charities say they are satisfied with their small cut because of the enormous investment in infrastructure and equipment that would be required to conduct the entire vehicle-donation process themselves. Congress has been less than satisfied, however, which is why 2004 is the last year for generous valuations (see Page F1 for changes to the tax law in 2005).
Economy, Election Strain Nonprofits (The Washington Post, Nov 7, 2004)
Reflect on Personal Interests to Find the Right Charity (The Washington Post, Nov 7, 2004)
United Way Steering Donors to Local Funds (The Washington Post, Nov 7, 2004)
Make Charity a Budget Item (The Washington Post, Nov 7, 2004)
Giving a Car? Get It in Gear (The Washington Post, Nov 7, 2004)
'Herblock' Legacy Begets a Growing Foundation (The Washington Post, Nov 7, 2004)
Profiles in Volunteering (The Washington Post, Nov 7, 2004)
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Less satisfying, also, are the things that can happen to donors who rely too heavily on the charities or middlemen to take care of everything that vehicle donations entail. Donors have reported getting hit with traffic tickets resulting from sloppy follow-through or intentional lawbreaking after they have turned the cars over. There are also scammers, often unscrupulous tow-truck operators and garage owners, who have been known to buy donated cars, not register them and then bill the former owners months or even years later for "storage."
Last year a spokeswoman for the Maryland Motor Vehicle Administration shared the following tips with The Post's Dr. Gridlock. These or similar rules apply in most jurisdictions.
Fill in the name and address of the charity under the "Assignment of Ownership" section of the vehicle title. This properly completes the transfer of ownership. Some charities may request that the new-owner information be left blank (taking ownership of the vehicle compels the charity to take an extra legal step in order to sell it). But leaving it blank leaves the donor at risk for future problems because such a title is considered "open" and unassigned. If the person who buys a donated car at auction does not register it, the ex-owner can be held liable for any fines or tickets the new owner may incur.
Keep photocopies of all paperwork.
Record the odometer mileage on the certificate of title.
Do not leave the license plates on the car. Remove them and return the tags to the motor vehicle authority.
Get, and keep, a receipt for the returned plates.
Cancel insurance on the vehicle -- but only after the plates have been returned to the motor vehicle department.