Advice from Nashville's Financial Guru Dave Ramsey
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
"Smart to give a car away?"
I have an older car that I don’t use anymore and was thinking about either selling it or just giving it away to charity. It’s got a book value of about $8,000, but I’m currently asking $5,000 because of the mileage. Lately, though, I’ve had a feeling that I should just donate it to a good cause and help someone. What are the benefits of selling versus donating?
Financially, it’s going to be smarter to sell that car than to give it away. But let’s take a look at the two and compare.
Let’s say you’re in the 30-percent tax bracket and you take an $8,000 tax credit for giving the car away. That will mean a savings of $2,400 for you at the end of the year. However, if you can sell the car for $5,000 you’d pay about $2,000 in taxes – and that means $3,000 in your pocket.
But if you feel like God is leading you to give it away, then you need to just forget about the money. When He speaks, you should listen.