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Yes, you can donate a car to charity; it helps in reducing your taxes. However, it is advisable to consult with a financial expert before deciding to donate your car to a charity.

A charitable contribution is when you donate money (including securities or business ownership interests), goods or services to an organization and deduct the market value of this contribution on your income tax return.

It is still possible to donate a car even if the title has been lost or misplaced. Other paperwork can be used in place to show the owner of the vehicle. Many companies will not take a donation vehicle without a title but some do take a no title car as a junk car donation.

If you have donated a car to the charity, which is sold for less than $500, you can claim the fair market value of your vehicle up to $500, and the same applies if the car is sold for more than $500.

If the charity sells your car sells for $500 or less, you can deduct $500 or your car's fair market value, whichever is less. For example, if your car is valued at $650 but sells for $350, you can deduct $500. Most charities will report the sales price of your car to you on Form 1098-C.

Kars4Kids is a classified 501(c)(3) nonprofit organization. You can check with your tax advisor or accountant to determine the amount of your benefit. The deduction is of value only if the donor itemizes his or her deductions. For a more detailed overview the IRS publishes a Donors Guide to Car Donation.