Although some charities do actually give some donated cars to needy families, they are in the minority. Most charities do not give away car donations. The reason can be summed up in one word; liability. You or I can donate car to someone and the chances of there being any negative consequences are pretty remote. However, the same is not true for a charity. There are many differences between a person and a charity. If you donate your car to someone and that car breaks down the next day or the next week, it’s not your fault since the transaction is considered to be “as-is”. However, if a charity donate car to someone and that car breaks down, the charity will probably be liable for the repairs. The difference is that a charity is a business and not a person and as a business it has to abide by the same laws as a car dealer. Whether they sell or donate car to someone, that car has to pass all safety and emission inspections. They are not able claim an “as-is” car donation.
Besides getting a tax deduction, most donors donate car for one of three reasons. First, the car has some major body damage or mechanical problem which the donor does not want to fix or can not afford to fix. Second, the car has very high mileage and the donor wants to get rid of it before it completely breaks down. Third, the donor is tired of the expense and inconvenience of having to make constant repairs. In all of these cases, the charity is required to repair the car before they can donate car to a needy person. Car repairs can be very costly and in many cases can exceed the value of the car. That is one of the major reason why most charities sell car donations directly to used car dealers or to parts yards either directly or through auctions.
Another difference between you and a charity is that you can donate car to someone who does not have car insurance or license plates. A charity cannot, anymore than you could buy a used car and drive it off the lot without it having passed inspection, without license plates on it or without it being insured. It is the same concept.
When you consider the costs and liability issues involved it is not hard to understand why most charities choose not to donate car to needy people.
Karen Campese is the Co-founder and CEO of Cars4Charities, a not for profit car donation center. They have over 1,000 respected charities that you car donate car to. When you donate car, you get a tax deduction and help a good cause.