The amount you can get for donating a car depends on what the charity sells or scraps the vehicle for, and whether you itemize your taxes.
Here is how it works:
- If the charity sells the car for under $500, you can deduct up to $500 or the car’s fair market value (whichever is less)
- If the charity sells the car for over $500, your deduction equals the actual sale price
- The charity must provide written documentation of the sale price
Most donated junk cars sell for $200 to $500 at auction or are scrapped for metal value. Your tax savings equal your deduction multiplied by your tax bracket. For example, a $500 deduction in the 22% bracket saves you $110 in taxes.
If you do not itemize deductions, donating a car provides no financial benefit. In that case, selling to a junkyard or scrap buyer pays more. Check how much your junk car is worth before deciding.