Should You Sell or Donate Your Used Car?

Last year, in this Parade.com article, I explained why late summer is a good time to buy a new car—the next year’s models start rolling off the assembly lines and into dealership showrooms in October. That means dealers want to move out the previous year’s inventory and are more likely to have deals to share.

While many people trade in an old car when they buy new, what are you supposed to do if you’re not in the market for a new-to-you car but you still want to get rid of an old car? This is a dilemma we recently faced.
Due to a death in the family, we inherited a 2003 SUV in great shape. Since it was from an older relative who didn’t drive much, the car had 75,000 miles on the odometer when we assumed ownership. Given that most cars are driven, on average, 12,000 miles per year, there should have been nearly twice that many miles on the car, given its age.
Soon thereafter our 10-year-old, everyday car, a Ford Freestyle, started having significant problems.
For starters the air conditioning gave out. Next, the all-wheel drive stopped working. Estimates to get both fixed added up to almost as much as the Kelley Blue Book (KBB) value for this car. Finally, earlier this summer, the rear windshield shattered–either by a passing lawnmower or the extreme summer heat. We’ll never know.
What I do know is that because this car is older and pretty beat up—both our daughters learned to drive in this car so you can only imagine the dents and scratches it received during parallel parking practice—we didn’t have comprehensive insurance anymore. That meant that if we wanted to replace that windshield, that would be on our own dime. Suddenly, all these needed repairs added up to more than the car was worth.
With this newer car sitting in our driveway, it became obvious that it was probably time to get rid of the Ford Freestyle. Since we weren’t interested in trading it in for a new vehicle, the question became this: should we sell or donate our used car? Here’s what we learned.

Sell a Car On Your OwnCompanies like Carmax.com and Autotrader.com are good places to start when trying to sell your car yourself. The only drawback that we found that after going through the “estimate” process was that we had to visit a nearby dealer to get our actual offer. I didn’t want to drive somewhere, get an offer I didn’t like, and then feel awkward about getting back into my car and leaving, having wasted my time. (FYI, before using these websites, I recommend doing pre-estimate research on KBB.com so you have a realistic sense of what your car is actually worth.)
Perhaps one of the best ways to sell a car yourself is via Craigslist. (Always be smart about how and where you meet someone you communicate with on Craigslist. Your safety should be your No. 1 priority.) That’s how my friend Denise sold her Ford Focus in 2014, even though her 2003 vehicle needed a new transmission. Despite the car’s KBB value being $2,000, her motivation wasn’t making as much money as possible—it was getting the car out of her driveway. So she priced it at $1,000 on Craiglist. A few hours later, she had an offer from someone would could come the next day and give her $900, which he did. “I gave him the title,” she recalls, “and he gave me the cash.”
What helped Denise successfully sell the vehicle was that, except for the transmission, the exterior and interior were in perfect condition. Since I couldn’t say the same for my Ford Freestyle, I figured selling it on my own wasn’t an option.
Donate Your CarWhile speaking with Denise about how she sold her car on Craigslist, she told me that she had also donated a used car in the past. While that process was seamless, she was disappointed in the resulting tax “benefit.” “I was only able to write off the car for $200,” Denise recalls. It seems that the only time that donating a car might make sense, says Brian Moody of Autotrader, is during a tax year when you might have a big tax liability you need to counterbalance. That would have been a good idea for us to do last year—we had taken an early IRA disbursement to pay our daughter’s college tuition bill.
We did research donating the car, nonetheless, and were impressed with the Car Talk Vehicle Donation Program—Car Talk, as in the NPR radio program. It was easy to use online, and we could have arranged to have the charity come pick up the car (versus us driving it to them), if we chose to donate it. Before you donate your car to any good cause, though, I would recommend checking out the organization on Charity Navigator, which gives you an inside look at how non-profits use those profits they get from your donations.
So what did we end up doing with our used Ford Freestyle? We junked it.
After all the research, it turns out that the car was worth more to us if we sold it for scrap metal. Last weekend we drove it, with its back window taped together with plastic bags, to a local junkyard. We removed the license plates, handed over the title, and the junkyard gave us $260 to take it off our hands. When I got home I called our auto insurance company to let them know we no longer owned the car, and they refunded us part of the $480 annual premiums we’d already paid to insure that car. So more cash in our pocket for getting rid of a used car we no longer wanted or needed.
Leah Ingram's favorite price is free! She is the author of 14 books, including two on frugal living. Her book Suddenly Frugal: How to Live Happier and Healthier for Less was recently released as an audiobook. Leah, a money-saving expert, is the founder of the popular frugal-living blog called Suddenly Frugal. Right now if you subscribe to Suddenly Frugal, Leah will send you an exclusive freebie. Follow her on Twitter @suddenlyfrugal and “Like” Suddenly Frugal on Facebook.

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