Are You the Type of Person Who Will Donate a Car Charity?

Prior to the tax changes of 2005, the average type of person in the United States who was prepared to donate a car to charity included just about everyone. However, since the 2005 tax deduction changes a subtle shift has taken place and, nowadays, it tends to be the upper middle class who is prepared to donate their car.

There would appear to be several different reasons for this.

To start with, those who are self employed have far more upward mobility than those who are employed and are more likely to take itemized deduction. The self employed also must pay their own contributions, plus those that you would normally expect to be paid by an employer.

This double form of taxation leads to the self employed being always on the alert for extra deduction that they can make. Donate Car Charity fits this bill nicely, as it means that on occasion up to several thousand dollars can be gained in deduction. This can also sometimes push you down into a lower tax bracket.

There will always be an element of the poorer section of the community that will still donate their cars even though they are unaffected by any possible tax deduction. These are the people who are only after the free towing offered by the third party agents for charities.

Another element of car donation that makes it attractive to the better off person, is a desire to be of assistance to a local charity who will take your car and use it for two or three years rather than just sell it for the wholesale value. This not only gives the donor a higher deduction value, but also the satisfaction of knowing that they have helped local people more needy than themselves.

Here we see how the demographic has changed since the change in tax laws. Although middle class people may donate a car that does not run very well, and is therefore liable to be sold off at its wholesale value, the better off can afford to donate better cars, thereby reaping the rewards of the higher deduction that are available.

This means that the type of car that is typically donated since the 2005 tax changes may not be very lucrative for the charity, unless it is running well and worth their while to fix up and use.