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Insurance Auto Auctions Vehicle Donation Program Review

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Insurance Auto Auctions (IAA) was founded in 1982 and has become one of the nation’s largest salvage auto auctions. With over 165 locations, IAA is perfectly positioned to be a force to reckon with when it comes to intermediary organizations that handle car donations for various charities.

Auto-Donation.com is the IAA Donation Division’s vehicle donation tool and One Car, One Difference is its public awareness program.

IAA’s Donation Division provides complete donation services for charities that are registered with the IRS as a 501(c)(3) nonprofit. Like most car donation intermediaries, IAA Donation Division’s Vehicle Donation Program handles the donation process from beginning to end on behalf of the charity. All the charity has to do is sign up through auto-donation.com or One Car, One Difference, promote their donation program, and wait for the funds to start rolling in.

Like IAA itself, the IAA Vehicle Donation Program is a reputable organization that consistently returns a high percentage of the gross proceeds to the charities that contract with them.

The Car Donation Process

Car donations to charity are big business in the U.S., and because it’s largely unregulated at this time, it’s a grand opportunity for disreputable organizations to get a lion’s share of the car donation pie and get filthy stinking rich in the process.

Here’s how it works:

Nobody in the family wants dearly departed Grandma’s canary-colored 1987 Oldsmobile Cutlass Supreme, which would cost more for gas in a month than the entire car is worth. So you decide to donate it. Grandma suffered from Alzheimer’s disease, so you decide to donate her car to the Alzheimer’s Association. You call ’em up, and they give you an 800 number to call. You call the number, which belongs to a for-profit commercial fundraiser or a nonprofit vehicle donation program that the charity contracts with. The intermediary takes down the info about the car, and the next day, a tow truck arrives with paperwork for you to sign, which you do. The next thing you know, you get a receipt in the mail that lets you know how much the car sold for and a letter of acknowledgement from the charity. (Keep these for your tax records if you want to claim a deduction.)

Here’s what happens from the time the car is towed away until you get the receipt:

The tow truck delivers the car to the auction. The auction sells it and gets, say, $500 for the car. Those are the gross proceeds. The auction house takes their cut of, say, $50, and sends the remaining $450 to the intermediary organization, which takes out, say, $30 for the towing fee and, say, $20 for the DMV paperwork. The $400 that’s left over is the net proceeds. From the net proceeds, the intermediary takes their overhead expenses and their fee and sends the rest of the proceeds to the charity.

  • Intermediaries who are highly reputable generally take no more than 25 percent of the net proceeds. From the $400 net proceeds, they keep $100 and the charity gets $300.
  • Reputable to marginally reputable intermediaries generally take between 26 and 40 percent of the net proceeds, leaving the charity with $240 to $296.
  • Disreputable intermediaries keep between 41 and 50 percent of the net proceeds, leaving with charity with $164 to $200.
  • Downright dirty intermediaries keep more than 50 percent, and some keep as much as 87 percent, leaving the charity with anywhere from $52 to $196 out of the original net of $400.

So, How Much Does IAA Donation Division’s Vehicle Donation Program Keep?

The California Attorney General requires all commercial fundraising organizations that do business in that state to submit paperwork on each vehicle donation they process on behalf of a charity. According to the most recent records on file, IAA generated $78,293 in revenue from donated vehicles and passed on $56,362 to the charities they work with, which is 72 percent of the gross proceeds. Not 72 percent of the net proceeds, but 72 percent of the gross proceeds. That’s a better record than the vast majority of intermediaries can boast. And that’s likely due to the fact that IAA is in the auction business, retains in-house towing labor, and has an in-house department that handles all of the DMV paperwork. Therefore, they can charge less for the auction, towing, and paperwork fees and return more to the charity while still making a tidy profit that they otherwise wouldn’t have made.

The Bottom Line for Insurance Auto Auctions Donation Division’s Vehicle Donation Program

IAA handles donations for hundreds of charities, including the American Red Cross, the American Heart Association, and the Boy Scouts of America.

If you want to donate your car to charity, head over to Auto-Donation.com or One Car, One Difference and pat yourself on the back for choosing a highly reputable intermediary that will make the most of your donation and pass a fair share along to the charity of your choice.

Insurance Auto Auctions Vehicle Donation Has Received Our 5 Star Rating.