Should I donate or sell my old car? (2024)

FAQs

Is it better to sell or donate? ›

If you need the money, make the effort to sell your excess—especially when it comes to big, expensive items. But if you do not need the money, just give your things away. Reselling your clutter adds time and energy, anxiety and frustration to the minimizing journey.

In the majority of cases, the savings found from retaining, maintaining and repairing your current vehicle far outweigh the costs of a new vehicle. This is true even in the case of buying a used vehicle. Another perk of keeping your current vehicle is that it is yours!

To gift someone a vehicle, you must transfer the vehicle title to their name and create a bill of sale. Selling a vehicle for $1 instead of gifting it could result in your recipient paying sales tax based on the car's fair market value — it's better to stick with the official gifting process.

Giving to charity makes you feel good

Donating to charity is a major mood-booster. The knowledge that you're helping others is hugely empowering and, in turn, can make you feel happier and more fulfilled.

Charitable giving can help those in need or support a worthy cause; it can also lower your income tax expense. Eligible donations of cash, as well as items, are tax deductible, but be sure that the recipient is a 501(c)(3) charitable organization and keep your donation receipts.

“If the repairs start to become more frequent and the costs are hard to keep up with, or if the car leaves you stranded often, making you late to work or putting you in a potentially dangerous situation, you might want to consider another vehicle,” Montoya said.

Depreciation rates slow as a car's age increases, with the highest rates during the first year of ownership. Even a gently used two-year-old model may cost significantly less than a brand new model of the same vehicle, because the older car has already lost as much as 40 percent of its value.

Cars older than eight to 10 years will be a riskier option, depending on the driving and maintenance history, while vehicles over 15 to 20 are usually nearing the end of their service lives.

60,000 to 100,000 Miles

If you want to squeeze the most value out of your vehicle, this mileage bracket is probably the best time to sell. While your car may need a couple of expensive repairs to run properly, it shouldn't entirely give up on you if it has been well-maintained.

What's the lowest you can sell a car for? ›

Can you sell a car for $1? In short, yes. But while selling a car for $1 will allow you to avoid capital gains and gifts taxes, the recipient of the car will have to pay whatever rate of sales tax your state charges on used vehicles when they transfer the title.

When Not to Trade In a Car. Although there are exceptions to this rule — as there are for most rules — don't trade in a car that is worth less than what you owe. In other words, if you get less when trading it in than the loan payoff, don't do it.

Several factors can affect the resale value of your car. These include mileage, age, condition, location, color, make and model. You can retain your car's value by regularly maintaining it and avoiding modifications that could decrease its appeal to buyers.

A cleaned and detailed car is worth more at trade-in than a worn and poorly maintained one. You might consider detailing your vehicle and making any minor car repairs. Fixing issues like windshield damage or minor engine issues, and cleaning it before an appraisal by the dealer can net hundreds more on the trade-in.

If it's not going to be worth the money because you're not going to use it enough, and eventually you'll have to give it away, it would be best to save your money in the first place. Over time, you'll get a better understanding of this and become much more streamlined in your spending.

Volunteering Your Time

Feeling connected to your community promotes your own health and well-being, at every age. When you have an ongoing volunteer relationship with an organization, you can see the influence of your gift of time. For example, you'll witness families that visit a food pantry each week thrive.

Donating throughout the year can significantly lower your tax burden, but make sure you're keeping the right documentation filed. If you're thinking of making a donation this year, you aren't alone. In 2022, 64% of charitable giving came from individuals for a total of $319 billion.