When you donate a car, you don't get money; you get a tax deduction. Charities usually sell junk vehicles for $500 or less, which is what your deduction will equal. If you itemize deductions and your car sells for under $500 then you can claim fair market value instead.
This is how the math would look:
- Charity sells your car for $400
- You deduct $400 from your taxable income
- At a 22% tax bracket, you save $88 in taxes
The tax deduction only matters if you itemize. In 2024, the standard deduction was $14,600 for single filers and $29,200 for married couples. The majority of people don't have enough deductions to accommodate these thresholds. With that being said, donating a car works best for higher value vehicles owned by people who already itemize.
For junk cars, selling often beats donating. A junk car buyer might give you $300 to $500 for the same vehicle with no tax filing required.
