Although most rental car agencies have systems in place for disposing of out-of-service vehicles, the options are often limited. Additionally, the process can often take valuable time that the rental agency operator could use to focus on the business of auto rental.
But now there is a new option. Moreno Valley, Calif.-based National Charity Support takes the headache out of the vehicle donation process, helping auto rental operators dispose of vehicles, get a better tax deduction, receive some positive public relations for their business, contribute to a good cause and reduce the liability that can be involved with transferring a vehicle title.
The Benefits of Donation
When a rental agency donates damaged vehicles to charity, the agency often receives a very small tax deduction, since the vehicles are worth so little money. A National Charity Support (NCS) reconditioning program can increase the value of the vehicle, which increases the amount of tax deduction the auto rental agency receives.
“We deal with quite a few financial institutions where it makes more sense for them to donate the vehicle rather than dispose of it,” says John Schuetz, executive vice president of NCS. “It works equally well, especially for the self-insured auto rental companies. It makes so much financial sense because they’re not going to get anything for these cars, and again it becomes another liability.”
Joe Blanco, co-owner of NCS, gave an actual example of a high-mileage SUV that a rental agency needed to dispose as an example of the benefits of vehicle donation.
“They’re not going to get much for that now. They’d be much better off having us recondition it and send it to Mexico or send it to Columbia,” Blanco says. “They will see a much higher return.” [PAGEBREAK]
If a rental agency does not transfer title properly when disposing of a vehicle, all sorts of bad liability scenarios can occur. If a rental car agency sells a high-mileage vehicle to a private party and the steering column later fails, the injured party may go after the rental agency that sold the vehicle.
“They’re always going to go after the deep pockets,” Blanco says.
Once a rental agency contacts NCS to donate a vehicle, NCS immediately obtains a Department of Motor Vehicles release of liability on the vehicle. Then, with a flat bed truck, NCS picks up the vehicle at the rental agency location, further releasing liability because the donated vehicle won’t be on the road.
“Once the vehicle is on the back of the flat bed, we assume all liability and fault,” Blanco says. “The transaction has been done in a safe manner that protects them from any liability.”
Rental agencies can concentrate on their business, rather than on disposing of vehicles. Schuetz and Blanco have many years of experience in the automotive business, Schuetz as a former national fleet manager for Kia Motors and Blanco as a former remarketing director for AutoNation.
Supporting the Community
NCS works with the rental agency to place press release announcements about the donation in local media and industry publications. Because people see that the agency is doing something positive for charity, the publicity often results in extra business for the rental agency. One NCS client is a landscaping company that got extra business because customers read about their vehicle donation in the local media.
Blanco says the $30,000 contract the landscaping company received was more than enough to pay for the vehicle. “You’re getting a write-off, you’re getting PR and in some cases you’re getting additional business,” he says.