Give a clunker for Christmas
December 8, 2011
There are 16 shopping days until Christmas, but more importantly if there's a clunker sitting in your driveway, 3 weeks to donate that car so you can take credit for it on your taxes in April.
The number of charities you can donate to is staggering. Do you have a pet cause? They certainly accept vehicle donations – virtually everyone does, from diabetes research to Sherborn's Peace Abbey. You know that annoying radio jingle urging “Kars for Kids” donations? That's what we're talking about.
Time to eject Junior's junky high school ride from the side yard and pocket some cash, right?
First, you have to find the title or apply for a new one from the RMV.
Then, which beneficiary will you choose? The state Attorney General's office urges consumers to look closely, to make sure the organization receiving the donation is registered as a legal nonprofit with 501(c)3 status, and to investigate the percentage of the donation that will actually benefit the charity (because they will in turn pay a third party to handle the vehicle donation and disposition).
Getting rid of the clunker in your driveway now could mean a tax benefit in April or immediate cash in your pocket.
Perhaps the recipient isn't as important as the tax benefit. But remember, that changed too a few years ago. You are no longer allowed to claim fair market value as a write-off. Those with rolling wrecks and other low-dollar-value vehicles are now limited to $500 tax credits (and only if you itemize on IRS form 1040 Schedule A) or the gross selling price that the charity gets when it's sold for scrap. And it may be a bit late in the year to chase around that paperwork.
Maybe if you can't pull it together that quickly you can make more by selling it to a junk yard instead.
There are local dealers to call, or you can use a handy website like this one that will quickly compute the value of your heap of scrap.
Why all of the hype around donating and scrapping old cars now? It's not all about saving you a few bucks on your taxes. Yes, it's all about the money to be made in the industry. Scrap metal prices have been steadily rising for several years, from $270 a ton in 2009 to over $400 a ton now. This source says recycling steel by scrapping and stripping old cars uses 75 percent less energy than making new steel, putting car recycling right up there with plastic water bottles.