Automotive Journal

What do you need to keep in mind when deciding whether to sell or donate a car you are ready to get rid of? One thing you need to consider the value of the car. Another thing to consider is whether there is a charity to which you might like to donate it. Also, consider you tax bracket and how it will affect your net profit, as well as considering what you time is worth to fix it and advertise.

In determining the value of your car, you need to consider what the “real value” is. Many people mistakenly believe that they will get whatever the Kelley Blue Book says is the expected value. That is not always the case. Other factors affect what you can expect to get. The value stated by the Kelley Blue Book (KBB) is a good starting point in estimating what to ask, but is often not a reasonable expectation. A more realistic estimate would be to cut the KBB estimate by 30%. Of course, it will be further cut by the tax liability based on your tax bracket.

Depending on your tax bracket, you will have to cut your net profit by whatever percentage you fall under. If you are in the 25% tax bracket and you get an offer for $1000 for your car, just know that after you decrease it by the 25%, you will only have a net profit of $750. You need to take this in to account when determining the net profit. This may well affect your decision as to whether to donate or sell.

An additional expense to consider when you think about selling is the cost of advertising. You will have to subtract whatever advertising expense you have from the net profit. Assume you are going to have to spend $80 to advertise in an auto magazine and $30 for a newspaper. That totals to $80. Subtract that from the $750 net, and you are not down to $670. To get the top dollar for your car you may need to get it professionally cleaned and detailed. That will cost you probably another $70. You are now down to $600 for that $1000 car.

You will want to ensure that the car is running properly. Take away another $75 for a mechanic to inspect the vehicle and write up an info sheet on the car’s condition that you can present to prospective buyers. It’s also important to remember that a car’s exterior condition may be more crucial to its sale than anything else. You may also want to repair body damage on the car as even the most seemingly insignificant everyday nicks and dings can discourage a buyer.

Do you see how the net value from selling the car now goes from $750 to $525? There is actually potential there for less than $525. What if something is wrong with the car? What if you need work done to fix some dents and scratches?

Now consider this. Most cars donated to charity are sold at an auction. In fact, the IRS instituted new rules in 2005 that stated that the only way to get “full” value after donating a car is if the car is sold at an auction and in use after you’ve given it away. Donating a car to charity will typically earn you a $500 tax deduction or the gross proceeds of the auction value of the car. Assuming that you donate a car and earn a $500 tax deduction – is the potential of a $25 profit for selling your car worth the hassle?

Selling a car can be quite time consuming. You will have to deal with strangers and answer all their questions and concerns about the car. You may get phone calls at all hours, some being very inconvenient for you. Your time counts for something.

What kind of time are you looking at to sell a car? Count on an hour and a half or so making signs and/or producing ads. Another one hour can be consumed in phone calls. Mechanic appointments may take two hours and may be inconvenient with work schedules. Cleaning and detailing may consume another half hour. You have easily just used up five hours before you ever get the car sold.

You will have to schedule times for people to come see the car, check under the hood and test drive the vehicle. You might even schedule with someone and have them no-show the appointment. Others not only want to look at the car themselves but will also request that you take the car to a mechanic that they trust for an inspection. And, most of the time, people with these type of demands are the ones who don’t close the deal! It is said that someone selling a car can optimistically expect five to ten inquiries that go nowhere before the car is sold. Let’s estimate that a total of three hours is spent meeting with people.

The total time involved so far, with conservative estimates, is approximately eight hours. You have to go through several things that may not be something you really are interested in doing, just to get a buyer. In contrast, to donate the car it takes only a phone call to get someone to come get it. You will also have the satisfaction of helping a charity. So which is the better deal for you, selling or donating?

Related Stuff:

Battery Tender Junior Motorcycle Battery ChargerFully automatic two-stage lead-acid battery chargerTrickle charger assures batteries are maintained after chargingIdeal for all lead-acid, sealed main... Read More >

Mastercool MSC52224A Infrared ThermometerInfrared thermometer ranges from -58 to 932 degrees F, with large easy to read 1" LCD display, scan mode, maximum temperature display, and F/C button. The unit includes 2 AAA batteries, instruction manual and a plastic molded carrying case.

Wii Band Hero featuring Taylor Swift - Super BundleBand Hero Superbundle Wii