Cascade Alliance

A Guide to Used Car Sales for Nonprofits

Are you looking to add additional ways to increase income for your agency?  Starting a used car lot could be a great opportunity!  St. Vincent de Paul operates a used car lot based off of customer donations.  This not only keeps cars out of the landfill but it gives an affordable option to people in the community to purchase a working car at a lower cost.  We also offer other items for sale in the car lot such as repair manuals, vintage knives, and a variety of items related to motored vehicles.

SVDP has staff that work specifically in the car lot to provide needed maintenance on the cars so they all run.  By selling donated vehicles on our used car lot, we cut out using a middle man or auction house.  We’re able to get more revenue from the sales as we don’t have to pay a fee and we can get higher prices when we sell directly to customers.  This also provides our donors with a larger tax write off.

Our goal is to make vehicle donation an easy and quick process for the donor. From start to finish, we process the donation in less than 15 minutes.

Keep in mind these general requirements when operating a used car lots:

Federal Law:

• Car dealers who sell more than five used vehicles in a 12-month period must comply with the Federal Trade Commission’s Used Car Rule.
• If your organization receives contributions of motor vehicles, boats, or airplanes, you’ll need to fill out an IRS Form 1098-C for each vehicle received that has a value greater than $500.

State Law:

• Most states have a limit of 5 vehicles that you can sell per year without a dealer’s license
• Before deciding whether to open your own used car business, research what your state requires so you know what you’re getting into via the Department of Motor Vehicles.

Other useful information:

• You must pay annual fees for maintaining a dealership license
• You will need surety bonds to ensure contract completion
• You will need to undergo annual educational training
• Before obtaining a dealer’s license, you must have a “lot” of predetermined space for your vehicle sales.

Click the document below for a full guide to processing donations and deciding whether running a used car lot would fit the needs of your organization!