Do you have a vehicle that you no longer want, but the hassle of trying to sell it seems like too much work? If so, donation may be the best solution. Not only will your donation help a charity that you support, it will also allow you to write off the value of the donation on your taxes – which could lead to more money in your pocket come tax time. The following answers to some of your potential questions can help better understand how car donations work.

Are there any limitations to what can be donated?

This depends on the charity, but there is generally a charity available that will accept your vehicle if you call around. Any vehicle you donate must have a free and clear title in your name with no liens on it. You may also need to show ID to make the donation.

Does the vehicle need to work?

Typically vehicles don't need to be in working condition. This is because charities rarely keep the cars for their own use. Instead, they are sold to scrappers that strip the car of valuable parts for resale, giving the charity a portion of the proceeds.

Do you need to drop off the vehicle?

Although this can vary depending upon the charity, usually the charity handles pick up. They will send out a tow truck to your location to take the vehicle and then deliver it to the charity's donation process center.

Are there any concerns you need to protect against?

Your only real concern is with the title and liability. Before allowing the vehicle to be picked up, make sure the title is signed over to the charity. For most car titles, this requires that you fill out the form on the back of the vehicle's title with your name, the date, the date of sale, and the name of the charity that is taking over ownership. You may also need to fill out a bill of sale or transfer of title form with your state department of motor vehicles (DMV). Contact the DMV in your state to find out if this is required.

How is the value determined for tax purposes?

Most charities will provide you with a form stating the final value of the form within a certain period of time after they sell it. Find out how long you can expect to wait for this form to arrive when you first arrange the donation, and then mark your calendar so you know when to contact the charity if they have sent your tax write-off forms by the expected date.

For more information, contact a company like Action Donation Services.