If you happened to have a place to store the cars, you can try selling the donated cars directly, and therefore getting a much better price for them, but you may have to deal with local and state regulations pertaining to running a car lot. Many communities have strict regulations in this regard, and placing a dozen used cars in front of your facility with “for sale” signs on them may put you on the wrong side of local statutes.
A frequent way to do this is to work through an agent who specializes in moving donated cars, who will arrange for everything. This agent will arrange for towing if necessary, cleaning, and will arrange to sell the car at a wholesale auction. Keep in mind there is a fee involved, and you may get fifty percent of the proceeds when it’s all done.
Car wholesale prices for are surprisingly low: it is common to get $300 or $600 for what looks like a very nice and serviceable used car, and then half of that will go to fees and the agent. Nevertheless, if you have a good flow of car donations, it can be an excellent way to bring funds into your organization.
Selling cars is a much more complicated than selling Playstations on a backyard sale. First, the donor will usually want to use the donation as a tax deduction, as they are entitled to do so. Some time ago, the deductions were equal to the market value of the cars, but newer laws have been passed that say that the donor is only allowed to take a deduction equal to the actual sales price of the car. For instance, if you sell a car at a wholesale auction for $500, that’s the amount the donor can deduct. And keep in mind a vehicle selling wholesale for $500 may actual have a market value of many times that.
Starting a car donation business means familiarize yourself with the ownership transfer regulations of your particular state. Your community’s motor vehicles department may help you on what paperwork is needed for car ownership transfers.