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If I am not going to trade in my car what are other good options to convert it into cash?

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4 Answers

up vote 6 down vote accepted

I would list it on Kijiji, Autotrader, or Craigslist.

A lot of people are often looking for older cars to just get around locally. Especially around winter time.

Or consider posting on some bulletin boards in local colleges.

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One scheme to beware of is the idea of donating your old car to charity for a large donation receipt. There are many perfectly good charities that can use your car, but there are also some fraudulent outfits that promise a large tax deduction in return. It's usually too good to be true, and the IRS is onto these schemes in the U.S., as is the CRA in Canada.

Here are a couple of articles discussing such schemes:

If you do decide it's not worth your trouble to sell your car and you don't need the money and you'd like to donate your car, find a reputable charity yourself – for instance, the Canadian Diabetes Association or The Kidney Foundation of Canada. The charity will either take your vehicle and put it to good use, or sell it and use the proceeds.

When done right, any tax receipt you may receive for donating a vehicle won't exceed the fair market value of the vehicle, and since such a tax credit is worth much less than 100 cents on the dollar, donating your vehicle only makes financial sense if you want to be charitable.

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It also helps you if the value of the car will most likely be low, has high mileage and few non-working features like A/C. :-) –  Zephyr Nov 30 '09 at 5:05
    
I've done this in the past, and got a good tax receipt and no audit. The trick I think is that the car was a real clunker, probably only worth a few hundred to a dealer. The charity that took it refurbished old cars, so it was worth much more to them than a dealer. –  DJClayworth Jul 7 '11 at 20:08
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I'm going to directly contradict Chris W Rea and say that donating your car is a good idea. I did this and it worked for me. However I'm going to admit that I did it in Canada, and that the car was a clunker. The charity was a reputable one that itself refurbished the cars and sold them, and the receipt was certainly for no more than the market value. The charity valued the car and set the receipt amount themselves, so there was no question that I could defraud the tax office. Nor did the sale generate an audit (though the value was nowhere near the $5000 value of property donated that we are warned triggers an audit).

So why was this a good idea rather than just selling the car and getting the full market value rather than a tax credit for it? First, being a clunker, the dealer wasn't going to give me the market value for it. Second, the charity came and drive the car away, rather than me having to advertize the car and spend days waiting at home for potential buyers who decided not to show up. Third, the charity was one I liked to support anyway.

So in short, this method won't make you the most money, but it has other advantages.

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@DJ. I think this is a valuable confirmation to what Chris said: "find a reputable charity yourself". Not a contradiction. :) –  gef05 Jul 8 '11 at 13:40
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I don't know if it's the "best" way, but we got rid of our old, dead car by phoning a tow company in the local paper. He paid us $100 to get rid of the car.

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Emphasis should be on "dead". :-) –  Chris W. Rea Nov 23 '09 at 18:49
    
Thanks YMCbuzz, I guess I should clarify - the car still runs but is over 10 years old. –  Zephyr Nov 24 '09 at 1:26
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