Beware Of Car Donation Charities Scam
As car donation charities are becoming more and more popular so are the opportunities for car donation charity scams. Although there are many legitimate not for profit car donation charities operating there are also those wanting to cash in on people's generosity and make a profit for themselves.
Beware of For-Profit Charities
It is important for all people interested in donating cars to charity to do their research and be informed of the risks involved. Most car donation scams will involve car dealerships or used sales yards claiming to run fundraisers or work for charities, when in fact it is simply a ploy to get free cars and sell them on for 100% profits.
Indeed many of these for profit charities or dealers will organise for the removal of your vehicle before they sell it on at auction or in their yards, only passing on at the very most 10 to 15% of the sales' profits to their stated charity, while keeping the rest for themselves.
To avoid being taken for a ride - look into the dealers or charities past before you entrust them with your vehicle. Try inputting their name into Internet search engines like Google, this will provide you with their details and hopefully any reviews that may indicate the validity of the charity.
Check Documentation
The next step is to request documentation or proof that they are in fact operating on behalf of a charity. Many charities accept vehicle donations so to ensure you are donating to a legitimate authority contact the Inland Revenue Service and ask for a list of qualified car donation charities.
Some charity donations can be made to the chosen cause directly, while other charities operate their car donation operations through an agency or dealer, so it is good to make sure both the charity and the dealer operating on their behalf are registered with the IRS.
If you are looking at donating cars to charity for tax deduction reasons you will want to look into the eligibility of each charity for tax purposes. Some charities will claim to offer car donations that allow you to claim back the value of your vehicle as an automobile donation through your tax return.
But beware, some of these car donation charities will not be registered with Inland Revenue and therefore you will not be able to claim your tax back. To find out whether these charities are legitimate request their "Letter of Determination" this will have been issued from the Inland Revenue Service. If they refuse to provide one, this will be your first clue they are not a legitimate charity.
Charity Operations
Not all car donation charities work in the same way so before you go jumping into anything it is a good idea to investigate just how each charity works. For example, some charities will use your donated car as a vehicle for transportation or hauling, which means they are directly benefiting from your donation.
This can not only affect your tax return but means you may not be directly contributing in the way you intended to your chosen charity. In other cases the charity may be using a specific dealer to sell your car on. If this happens the charity and dealer may have an arrangement in place where the charity receives a set flat fee for the vehicle you have donated.
Let's say the charity you have chosen sells your car to a dealer for a fee of $50, since your tax deduction is based on the sales value of the vehicle and approved through the receipt provided from the charity you have donated it to, it will mean you will only receive $50 back.
Does this seem fair? It is up to you to make that decision but keep in mind other charities may be using auctions and online sales that will help fetch a better price, making a bigger difference to the charity and in your own pocket.
The way in which the charity is going to use your contributed automobile will give you a good indication of the legitimacy of the charity. Some charities simply sell on the vehicle while others will fix it up and give it to those in need.
Charity donations can be a very honourable and rewarding activity but the last thing anyone wants when they are trying to make a contribution is to get ripped off. So to avoid being scammed by car donation charities make sure you do your research first and always check the authenticity of the charity before you make a donation.
Beware of For-Profit Charities
It is important for all people interested in donating cars to charity to do their research and be informed of the risks involved. Most car donation scams will involve car dealerships or used sales yards claiming to run fundraisers or work for charities, when in fact it is simply a ploy to get free cars and sell them on for 100% profits.
Indeed many of these for profit charities or dealers will organise for the removal of your vehicle before they sell it on at auction or in their yards, only passing on at the very most 10 to 15% of the sales' profits to their stated charity, while keeping the rest for themselves.
To avoid being taken for a ride - look into the dealers or charities past before you entrust them with your vehicle. Try inputting their name into Internet search engines like Google, this will provide you with their details and hopefully any reviews that may indicate the validity of the charity.
Check Documentation
The next step is to request documentation or proof that they are in fact operating on behalf of a charity. Many charities accept vehicle donations so to ensure you are donating to a legitimate authority contact the Inland Revenue Service and ask for a list of qualified car donation charities.
Some charity donations can be made to the chosen cause directly, while other charities operate their car donation operations through an agency or dealer, so it is good to make sure both the charity and the dealer operating on their behalf are registered with the IRS.
If you are looking at donating cars to charity for tax deduction reasons you will want to look into the eligibility of each charity for tax purposes. Some charities will claim to offer car donations that allow you to claim back the value of your vehicle as an automobile donation through your tax return.
But beware, some of these car donation charities will not be registered with Inland Revenue and therefore you will not be able to claim your tax back. To find out whether these charities are legitimate request their "Letter of Determination" this will have been issued from the Inland Revenue Service. If they refuse to provide one, this will be your first clue they are not a legitimate charity.
Charity Operations
Not all car donation charities work in the same way so before you go jumping into anything it is a good idea to investigate just how each charity works. For example, some charities will use your donated car as a vehicle for transportation or hauling, which means they are directly benefiting from your donation.
This can not only affect your tax return but means you may not be directly contributing in the way you intended to your chosen charity. In other cases the charity may be using a specific dealer to sell your car on. If this happens the charity and dealer may have an arrangement in place where the charity receives a set flat fee for the vehicle you have donated.
Let's say the charity you have chosen sells your car to a dealer for a fee of $50, since your tax deduction is based on the sales value of the vehicle and approved through the receipt provided from the charity you have donated it to, it will mean you will only receive $50 back.
Does this seem fair? It is up to you to make that decision but keep in mind other charities may be using auctions and online sales that will help fetch a better price, making a bigger difference to the charity and in your own pocket.
The way in which the charity is going to use your contributed automobile will give you a good indication of the legitimacy of the charity. Some charities simply sell on the vehicle while others will fix it up and give it to those in need.
Charity donations can be a very honourable and rewarding activity but the last thing anyone wants when they are trying to make a contribution is to get ripped off. So to avoid being scammed by car donation charities make sure you do your research first and always check the authenticity of the charity before you make a donation.