You don’t get cash from donating a car. You get a tax deduction. The deduction equals the amount the charity sells your car for, which is often $500 or less for junk vehicles. If your car sells for under $500, you can claim fair market value instead, but the benefit only applies if you itemize deductions.
Here’s how the math works:
- Charity sells your car for $400
- You deduct $400 from your taxable income
- At a 22% tax bracket, you save $88 in taxes
Compare that to selling directly to a junk car buyer. You might receive $300 to $500 cash for the same vehicle. That money goes in your pocket immediately with no tax filing required.
The tax deduction only matters if you itemize. In 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples. Most people don’t have enough deductions to exceed these thresholds.
Donation works best for higher-value vehicles owned by people who already itemize. For junk cars, selling often beats donating in real dollar terms.
