Charity car donation is very popular. It is a good way for a person with an older car to avoid the problems and stress associated with either trading it in or selling it privately. Most people are under the assumption that these donated vehicles are repaired if needed and given to a person or family that cannot otherwise afford one. This assumption is simply not true. In fact, the majority of car donations are sold.
Charities that accept car donations receive phone calls almost on a daily basis from people requesting a car. Each person has a very sympathetic story of hardship and need. It is not that charities are not moved by these stories. They really would like to help. However, the problem is that most people have the unrealistic notion that a free car will not cost them any money and it will solve all their problems.
The fact is that the free car can, in many cases, add to their problems. Although the car maybe free, there are costs associated with owning and driving it. A driver’s license is required in order to legally drive it. Before the car can be registered, it has to be insured. At a minimum, liability insurance is required. The cost of that will vary by state, and the owner’s age and driving record. On average that insurance will cost about $70 per month.
Once the car recipient obtains the insurance, they then have to pay for the license plates and the title and registration fees. Those fees vary by state, but the average is $100. One positive thing is that there will not be any tax on the car since it is a gift. Once the vehicle is register, it then has to be inspected. Even if the charity had the car inspected prior to car donation, it has to be done again under the new owner’s name. That inspection is not just for the safety of the vehicle. It is also emission testing. That inspection will cost at least $25.
The person who receives a car donation should expect to spend $200 of their own money just to be able to drive it. That does not even include the cost to fill up the gas tank, which averages $50. Then there are the maintenance and repair costs. The typical car that is donated to charity is eight to ten years old. That is the time when expensive or more frequent repairs are most likely to occur. Even without a major breakdown, the monthly cost to maintain the car will be in the neighborhood of $100.
In the best case scenario, the yearly cost of owning a free car is about $4,000. Most people who are in dire straits do not have that amount of disposable income. Many believe that the car will enable the person to get a job or a better job that will then cover the cost of car ownership. While it may help the recipient earn more money, the reality is that the money will used to cover unpaid bills and for the necessities of life like food, shelter, clothing and child care. There will not be enough left over for the car. Thus, donating a car to a person in need is not the answer.
