Thursday, August 10, 2017

How to Determine Fair Market Values for Car Donations

How to Determine Fair Market Values for Car Donations
When making car donations, it's really important to research and identify the fair market value of your vehicle before you decide to donate. Why does this matter so much? Gone are the days when, no matter what happens to your car after you donate it, you can still deduct the value listed in the Kelly Blue Book.

Now, only if your vehicle is going to be kept by the organization to which you donate are you able to base your deduction on the actual fair market value. However, charities that accept car donations Madison and then sell them destine you to only be able to deduct the actual sale price. The only exception is when your car sells for less than $500. In such an instance, your fair market value becomes important again, because you are able to deduct that amount (up to $500), even if the sale price was lower.

Steps to Fair Market Value for Car Donations Madison

The fair market value of your car is based primarily on these five factors:
  • Make
  • Model
  • Year
  • Mileage
  • Condition
Most of these points are quite easy to evaluate, as they're objective (make, model, year, and mileage). However, condition is somewhat more subjective and requires the evaluator to be realistic and attentive to detail. If this is something you're attempting yourself, you'll need to know the accident history, note any surface damage on the exterior, and check for any problems with the interior.

Where to Look for the Actual Numbers for Car Donations Values
There are two main resources that people use to check fair market value. The most popular is Kelly Blue Book. It is generally considered easy to use, with fairly accurate pricing information. The other is the National Automotive Dealers Association site. This is the guide most commonly used by dealerships when setting trade-in pricing. Experts often suggest that individuals attempting to establish fair market value check both sources and assume your vehicle sits at slightly below the top end of the pricing spectrum for its condition category.

Whatever you do, remember that car donations Madison can be a great way to personally benefit from gifting your vehicle, and making sure the community benefits, too.

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