If you are thinking about what to do with your old car, sell it or donate it, then you have to understand the advantages and disadvantages of both ways. There are a lot of positive aspects of donating your car but do not forget the drawbacks that may not worth the good deed. These are pros and cons of selling and donating car.
Selling Your Car – Pros
- You can get the Bluebook value or a bit below.
- Once you sell the car, you will get the money right away.
- You can sell your car from home. No need to go anywhere.
- There is no time limit in which you have to sell your car. You can do it whenever it is most convenient for you.
- If you are not satisfied with the price someone offers, you can decline it and wait for the next buyer.
- For extra works and features you put into the car, you can charge more for what you have done with it.
- You are able to sell your car online putting it in front of tons of potential buyers.
- You can control every step of the process and make all the decisions.
Selling Your Car – Cons
- It may take several weeks or months to sell your car so it is unlikely to get cash immediately as you wish.
- You are required to fill out the Department of Motor Vehicles (DMV) paperwork before selling your car.
- If the car breaks down suddenly after you sell it, the buyer will claim or take legal action.
- Many buyers try to negotiate to get a lower price and this can be annoying.
- You need to report the sale as income and, as a result, lose money from taxes.
- Sometimes it’s dangerous to meet strangers and it can be difficult to find a public area depending on where you live.
- When listing your car online you can be targeted by scammers offering deals which are too good to be true.
- Advertising your car is costly and time-consuming.
Donating Your Car – Pros
- Many charities offer free towing or pick-up from a location that is most convenient for you.
- You can fill out online donation form which is fast and easy, with step by step instruction.
- There are customer service representatives to assist you or answer your questions.
- You will get a good amount of tax deduction for your donation. For example if it is sold for under $500, you are able to claim the fair market value up to $500.
- No need to deal with people trying to negotiate for a lower price.
- You can still donate your car even it is no longer running.
- It is the best way to help environment by recycling your car.
- The most important thing is you can help people in need. It will also make you happy and give a sense of personal satisfaction.
Donating Your Car – Cons
- You do not get money from car donation. This can be a problem if you need money to buy a new car.
- Even you will benefit from tax deduction, but it is not fast cash.
- You can’t just donate to any charity. Some charities don’t accept car donation while some charities do not qualify for tax break.
- There is paperwork involved which can be tedious. It is your responsibility to transfer the title as well as provide all information about the car.
- It’s quite complicated to deduct it from your taxes and you may not get the amount that you expected.
- There are many so-called charities that are running a scam. If you donate your car to them, you will end up losing tax deduction and likely being flagged for an audit.