Junking your car is better if you need cash now. Donating is better if you want a tax deduction and support a charity. Most people get more immediate value from selling to a junk car buyer than from the tax write-off a donation provides.
When you junk a car, you receive cash on the spot. Payments typically range from $100 to $1,000 or more depending on the vehicle’s weight, condition, and part value. You walk away with money in hand.
When you donate, the charity sells your car and gives you a receipt. You can deduct the sale price on your taxes, but only if you itemize deductions. Most taxpayers take the standard deduction, which means the donation provides no tax benefit at all.
Donation makes sense if:
- You itemize deductions on your taxes
- The vehicle has decent resale value
- You want to support a specific cause
- You don’t need immediate cash
Before donating, find out how much you can actually get from a car donation. Many people overestimate the tax benefit.
