Car donation is a non-cash charitable contribution. You will have two options during donating your car. You can give the car to a standard charity, which will later sell your car and will use the money to run their services. The other option is, you can donate the car to such a charity, which will use the car for their operations.
The second option gives you more value than the first one. To qualify for the tax deduction after donating a car, your entire deductions would have to be superior to the standard deduction.
Assume that you donated your car to a charity that has 501(c) (3) tax-exempt status. The charities usually sell far less than the market value. After selling your car (that has a market value of $1000), it will provide you a receipt that indicates the sells figure. Suppose they sold the car for $400. If you are in the 33% tax bracket, you are allowed to deduct $132 from your taxes. It means your $1,000 car gave you a $132 tax cut; only this much is your personal gain.
If you donate the car to a charity that will use it as part of its stated cause, it will allow you to ask 33% tax cut from the actual market value ($1000); meaning, $330 in your pocket. Clearly, the second option is giving you more cash back.
Donating a car to a charity has multiple benefits. It is a way to get rid of old cars from the garage which eventually earns a tax deduction option; not to mention; you are participating in a worthy cause.