How Do You Donate Your Car?

If you’ve got a car that you don’t use but would like to get some money for, donating your car to a charity may be a wise choice. By donating your car you can deduct an amount from your taxes based on the price at which the car sold. Be careful though or there are a few traps that could catch you unaware. If you learn the guidelines set forth by the IRS you will be able to maximize the deduction you can claim from your car donation.

How will this factor into my taxes?

You can find more details about the IRS’s guidelines for donating vehicles by reading IRS Publication 4303. Here’s the gist of what you need to know. First of all find a charity that you would like to donate to and make sure that it is a section 501(c)(3) organization and is accepting car donations. Next figure out the value of your vehicle and keep the appropriate documentation on hand to prove it.

Figure out how much you can deduct

When itemizing your donation on your 1040 income tax form you should state your estimate for your car’s value for deduction. Keep in mind that if the charity is planning on selling your donated car then the amount you’ll actually be able to deduct will be determined by the gross proceeds received by the charity. They will provide you with a receipt which you must provide to the IRS along with a few other pieces of documentation specified in the IRS publication above.

If on the other hand the charity makes significant use of the car or sells it for a lower price to a needy person, you may deduct the fair market value of your car from your taxes. For deductions up to $500 you must provide basic information such as the name of the charity, the date of your donation, the location where you donated the car, and a description of your car.

If the value of the car you have donated is between $500 and $5,000, you will also need to fill out Form 8283, Section A. And if the value is greater than $5,000 you will need to fill out Form 8283, Section B instead and obtain a written appraisal from a qualified appraiser.

Documentation is your best friend

It’s highly recommended that you collect all the necessary documentation as asked for by the IRS. You could be prevented from deducting more than $500 for your $4,000 car if you don’t provide Form 8283, Section A. Do your research before donating to a charity. You don’t want to donate a car you’re expecting $500 for only for them to sell the car through a middleman for a fraction of the price. Ideally you would like to know that the charity will either use your car in its operations or provide it to someone needy so you can deduct the full fair market value!

Old cars can be a hassle to get rid of. But as long as you find the right charity to donate to, you can get some extra cash in your pocket and help a good cause!

Steps to Take When Filing a Car Insurance Claim

I got in an accident, what do I do?

You’ve just found yourself in an unfortunate car accident. You know that you need to call your car insurance company to file a claim, but what steps can you take to ensure the process goes as smoothly as possible? Before you go can home and lie down you’ll need to make sure you’ve got all the information you need to present to your car insurance provider.

You never know if you might be taken to court so it’s best to record as many things as you can following the accident. After you’ve made sure everyone is okay talk to the other driver(s) involved in the accident to get the following information:

* Their full name, address, and phone number

* Their car insurance information

* The other vehicle’s license plate number

Beyond this, don’t discuss anything about the accident with others involved. You might have heard the phrase “never admit fault.” Even if you feel you might have caused the accident, you don’t want to say anything, otherwise that admission could be used in a claim against you or you could be put in a much worse situation if you are taken to court. Also try to get the contact information of any witnesses who are willing.

A picture is worth a thousand words

You will want to make sure that you take as many relevant pictures as possible. Take several pictures of the exteriors (and interiors if necessary) of all cars that were involved. Take pictures that capture the surrounding area along with the cars to provide a context for the accident. If there are any injuries, be sure to take pictures of those as well.

Start making calls to those you’ll need help from

Unless the damage is just a scratch or small dent and nobody is injured, you’ll want to also call the police. This is when you should talk about what occurred. Give as many details as possible but still don’t make any admissions of fault or blame yourself. Stick to the facts and allow the insurance companies to figure out who’s to blame.

Make sure that you call your insurance company the same day the accident occurs (if not possible the same day then as soon as you can afterward). Cooperate as much you can and chances are, since you’ve recorded the specifics of the accident so well, they will be more willing and able to accommodate you. Make sure you also check with your car insurance company before planning for any repairs. They’ll most likely want to inspect your car for larger claims and you don’t want to repair your car only to find out later that they won’t cover it. Keep all receipts and records of any car repairs or visits to the doctor following the accident as these will be relevant to the claims process.

Of course the best outcome would be to avoid an accident altogether, but life isn’t always so ideal. When you do run into these sorts of situations, it’s best to get more information than you need because that’s what will help you later on. Stay safe and be prepared!

How To Reduce Your Insurance Rates

Car insurance rates vs. premiums

The first thing to know in order to reduce how much you pay for car insurance is the difference between car insurance rates and car insurance premiums. A car insurance rate is what you can think of as the baseline for an insurance provider. This baseline is then modified based on your individual differences and the end result is your car insurance premium. So the more important question then becomes, how can one decrease his/her auto insurance premium?

Many factors can come into play here. To understand how these factors play into how much you’ll pay, you are going to have to think about things from the insurer’s point of view. Which things about you or your behavior might increase the risk to the insurance company? As you’ll soon find out, there are a multitude of components that go into determining this risk, some you can control and many you actually cannot.

What role does age or gender play?

Someone who has just started driving will definitely have to pay higher rates. Teenagers are much more likely to get into accidents due to lack of experience. Until you’ve aged a little and have a track record that proves you’re a safe driver, the premium will be high. If however, you do get into an accident and end up filing a claim, your premium will promptly be raised.

Even your gender can affect these premiums. If you’re a young man, all factors equal you’ll pay more than a young woman. But strangely enough, older men will pay less than older women (though this difference isn’t as much).

Your costs will go down if you’ve maintained a good credit score. Apparently good credit habits coincide with a lower probability of causing an accident.

How your car affects the price

The characteristics of your car has a major effect on your car insurance premium too. A car that is safer will obviously yield a lower cost. Some factors that can affect this safety include better traction, airbags, and car frames that are well designed for crashes. If your car is big and is considered relatively safe then you won’t have to pay as much because it will be less affected by a collision. If you have a newer more expensive model you’ll accordingly pay more since repairs will also be more expensive. On the other hand, if an old car gets totalled it might make more sense to just have it replaced instead of trying to get it repaired; therefore older cars will usually have less expensive car insurance.

Where you live will change your price

Your area of residence will also affect how much you pay (the more accidents occur in your area, the more you shell out). More claims will be filed in places with a higher population density, because the more people there are the more likely for accidents to happen. If the unemployment rates are high then less people will be able to afford car insurance which unfortunately translates to a higher premium for yourself.

As you might be able to tell, you can influence these factors to varying degrees. The most notable of which are how safe of a driver you are and what kind of car you drive. Of all the factors, one has the most control over these two. If you want to reduce your car insurance premium, being wary of collisions and choosing a safe, less expensive car can’t be overstated.