Beware of car donation scams

With an open car title, the individual can sell the car to another person or to a used-car dealer for cash, Day says.

If you don't have a copy of the title papers, contact your state's department of motor vehicles, or DMV, to get them. And don't leave your license plates on the car. Return them to DMV or transfer them to another car.

"Make a copy of the front and back of the title after signing it over. Remove all plates and personal papers from the car and wipe out all garage door links (and information in) telephones and navigation computers, and cancel any remaining extended warranty insurance," Marks says.

To good to be true?

If you've managed to sidestep the car donation scam, you may be in line for some nice perks when you donate a used car to charity: tax deductions and incentives like vacation packages and gift certificates.

Steven J. Weisman, author of "The Truth About Avoiding Scams," says, "When charities offer these perks, it is important to note that the value of your donation for income tax deduction purposes is reduced by the value of the perk you receive."

If you donate a car valued at $5,000, and you receive from the charity a voucher for a vacation worth $1,000, you must reduce the amount of the tax deduction you claim by $1,000, making the deduction $4,000, he says.

IRS publication 561 provides the latest details on how to determine when and how much of a tax deduction may be taken for charitable donations, says Weisman. The IRS has a tool that helps determine the fair market value of items being donated.

John W. Van Alst, National Consumer Law Center staff attorney, suggests donating cars to charities that give them to low-income families for free or at subsidized costs. "It is better for these families and donors who may be eligible for a larger deduction than if they had donated to charities that scrap or resell vehicles," says Van Alst.

Charities that donate directly to low-income families can be found at the Opportunity Cars website.

What if you've been scammed?

If you realize you have fallen for the car donation scam after donating your car, you have options, says Jeannine Fallon, spokeswoman for "Report the charity to the attorney general or the consumer fraud investigation division of your state government," she says.

You also should check with your accountant on whether you can still claim a tax deduction for the car, Fallon says.

If you're careful, you can donate your car to charity without a hitch. Just ask Kimbirly Orr, a marketing consultant in Colorado. "Upon our father's death, my sister and I donated a classic 1979 Cadillac Seville to the Boys & Girls Clubs of Metro Denver. It was effortless and painless for sisters who had a lot more to deal with than parking a car," Orr says.

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