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Are There Risks When Donating a Vehicle?

Are there risks when donating a vehicle? For the most part, donating a car is a very easy and risk-free.  It should be a fairly simple process as long as you make sure you are donating a car through reputable companies.  Most car donation companies are required to register with the state as a professional fundraiser and are regulated by the Attorney General or Secretary of State.  It is helpful to inquire with the company you select as to just how much profit is going to the charities.  Some vehicle donation companies take 50% so you want to find a company that gives at least 75%-80% of the net proceeds to the nonprofit you select. This is the amount that Center for Car Donations provides to our nonprofits. Anything less than that and the charity may not see a big return.


You will be required to have a free and clear title.  The title needs to be properly signed and given to the driver who picks up your vehicle; this is standard practice. In some states, like California, you are also required to send in a Release of Liability to inform the DMV that you are no longer the titled owner. Center for Car Donations can provide you with that form if you do not have one.  You can also find the form online.  Once the driver picks up your vehicle, you have no more liability.  If you, for some reason, do receive a ticket or registration notice after you have donated your car, be sure to call the car donation company to handle this on your behalf.  Because the IRS changed the tax laws in 2005, you will have to wait until your car sells before you receive your tax receipt.  Please be aware that you will be able to claim the value for which your vehicle sold at auction, NOT the Kelly Blue Book amount. If your vehicle sells for over $500 you will also be issued a 1098 B & C form, as required by the IRS. This form will have the actual sale price of your donated vehicle and the amount you can legally claim. If you have any questions about donating a car or the car donation process, call 877-411-3662 or visit

release of liability example