You are intending to donate your car and you feel you have done adequate research. You have selected your charity but the tax deduction part seems confusing. You do not seem to be very clear on it. Firstly one need to know what is fair market value. Fair market value may be defined as the price a willing buyer would pay and a willing seller would accept for the car when neither party is under any compulsion to buy or sell nor both parties have a very good knowledge of the relevant facts. One must be clear that the fair market value is lesser than the blue book value though some people still believe that both are the same.

You can claim fair market value deduction only if the charity uses the vehicle for its own use. In this case the charity would have to give a written statement that they intend to make an intervening use of the vehicle, detailed description of where they intend to use and for how long and also an assurance that they will not sell the vehicle after usage. If they intend to repair the vehicle that also need to be clearly stated and they should give the guarantee that they will not sell it after repair. The charity can also acknowledge that they have sold the vehicle to someone in need at a very low price and in such a case the donor can claim the fair market value as deduction. This clause will not apply if the proceeds from the sale of the vehicle go to someone in need.