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Article Teaser: The truth is, there is no universally right way to dispose of a used car. Decide which of the following statements best describes your situation for some specific advice on how to get rid of your used car.

Keep reading below...

How to Decide if Selling, Trading or Donating a Car is the Best Financial Choice

Copyright (c) 2010-2017

Anyone who is getting rid of a used car has seen advertisements from charities that encourage car donation. Most car owners have also seen commercials from car dealerships offering lucrative trades or know people who have sold their used vehicles through online or newspaper based ads. Unfortunately, all this information does little to clarify which method is best in any given situation. The truth is, there is no universally right way to dispose of a used car. Decide which of the following statements best describes your situation for some specific advice on how to get rid of your used car.

Money is no object, but you have time constraints. If you are not worried about recouping any money from the sale of your used car, donation is by far the best option. Most charities that accept used cars are willing to come to your home or garage to pick them up at a mutually convenient time. This saves you the time and hassle of posting for sale by owner ads, and gives you the added benefit of helping a worthy cause. To streamline this process even more, work with a charity that auctions used cars. In most cases, they will provide you with a receipt that states the sale price of the car, which will make it easier to file a deduction. This receipt will also decrease the chance of an audit.

You own a restored vintage car or a car in pristine condition. Selling your own vehicle is always the best option with a car that is rare or whose true value is more than the Blue Book value. Most dealerships that accept trades offer credits based on the Kelley Blue Book value. For cars with newly replaced parts or those that feature expensive custom touches, this value may be far less than what a car would sell for on the open market.

The same principle applies when it comes to the tax deductions that come with car donations. While the amount that an owner can claim is based on Fair Market Value (FMV) not just the Blue Book listing, deducting a higher price can raise red flags on your tax forms and may bring on an audit. In order to avoid this, make sure that you carefully document all the improvements that were made to the car and take pictures to confirm the condition.

You own a low value car that does not run or requires significant, expensive repairs. In this scenario, donation is the best way to go. Often, charities will accept cars, regardless of the condition they are in. While the deduction will be small, it will save the owner the costs associated with having a non-functional car towed or disposed of. For cars that are worth less than $500, do not expect to receive a huge tax break, but this deduction will have some impact on the amount that you owe.

You are buying a new replacement car from a dealership. This is really the only situation in which making a trade can be worthwhile. Typically, the money that is garnered through a trade will be applied to the purchase price of your new car. Most dealerships will actually offer less for used cars than owners can get on the open market, but the ease with which trades are made can more than make up for the lost funds.

When deciding whether selling, trading or donating a car is right for you, consider both the value of your car and the amount of time that you are willing to spend finding it a new home.


About The Author: Shop Amazon - Top Gift Ideas
Written by Leona Arwine. Car donation is a great way to donate to charity. If you decide to donate a car, the next step will be choosing which charity. Visit the author's website at http://www.cardonationscharity.com/ to view a list of charities that accept vehicles as donations and how your contribution will help them.

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Internal ID: #7490
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