Car Donation Charity Scams and How to Avoid Them

More and more, we hear bad press about car donation companies that are scamming their customers and shortchanging charities of much-needed money. You don’t want to fall victim to their games, but increasingly, these companies are becoming trickier and harder to escape. You need to be able to recognize the signs when you see them, so keep the following guidelines in mind when you’re considering donating a car to charity.

Sarah Lee Marks, author of “The Complete Internet Car Buying Guide” spoke on avoiding car donation scams, and had some very good advice. For example, when the company comes to retrieve your car, “make sure they come with preprinted forms, uniforms and a branded tow vehicle before you sign over the title.”

Research the company both with a phone call and through an online search. If you are still unsure, you can request certain forms from the charity, including the 501(c)(3) letter that is granted by the IRS as well as the incorporation document given by the secretary of state’s office.

S.E. Day commented “Visit the charity, contact the IRS to inquire about the charity’s viability, request its IRS Form 990 (nonprofit tax return) and make sure the title is signed by the company receiving the vehicle.”

One of the biggest scams to look out for when you donate a car is when the organization asks you to turn over your car without signing over the title.

“The individual will advise the victim that he or she is not authorized to sign the title,” Day says. “He or she will inform the victim that the title has to be signed by the authorized personnel at the office.”

Always make sure the title is transferred correctly and completely, otherwise the organization can use the open title to resell your car for money.

If you still happen to fall victim to a scam, contact the consumer fraud investigation division of your state government or the attorney general.

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