Transferring Titles of Donated Cars

Instead of selling your car when it's time to purchase a replacement vehicle, you may wish to consider donating it to a charitable organization. There are many different groups throughout Texas that will accept a vehicle donation, including charities that work to provide educational services for children or healthcare for low-income families. Some of these organizations will even pay for the towing services required of used cars that are not in working condition.

If you donate a car, the new owner of the vehicle will need to complete an Application for Texas Certificate of Title (Form 130-U) and check the box in Section 21 that reads "$10 Gift Tax." Both you and the recipient of the vehicle will need to sign an Affidavit of Motor Vehicle Gift Transfer so that no sales tax is due at the time of the title transfer and vehicle registration.

Additional Paperwork

Whether you sell or donate your used car, it is always a good idea to complete a vehicle transfer notification. This form lets the TX Department of Motor Vehicles (DMV) know that you are no longer in possession of the vehicle and should not be held liable for traffic tickets, parking violations, fines, or other infractions.

However, you only have 30 days after you sell or complete the donate car process to complete the transfer notification.

Don’t Forget Your License Plates

Another good way to protect yourself when making a vehicle donation is to keep your license plates. If they are fewer than seven years old and you're purchasing the same class of vehicle as a replacement, you can pay a $5 fee to have the plates transferred after your car donation.

Car Donations and Tax Deductions

Once you’ve transferred the car title, don't forget that you may be entitled to take a tax deduction for your vehicle donation. Keep accurate records regarding your vehicle donation and consult a tax attorney for advice on how to properly prepare your return.