Costs and Timing of the V-DAC program


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	COSTS
	For virtually any non-profit, the actual vehicle donated to it is not useful, because of the difficulty of selling it. Our vehicle donation program converts that vehicle, in the quickest and most efficient manner, into cash that the non-profit can readily use.

	V-DAC is a totally free service for donors and non-profits. All pickup, transportation, sales and administration costs are covered by the revenue from each vehicle. The non-profits get only checks for net revenue- never bills. Any shortfalls in vehicle revenue are covered by the program and never charged to the non-profit. V-DAC service does not include appraisals or cover any expenses donors may have in preparing vehicles or paperwork.. V-DAC is forbidden by law from making or paying for appraisals of donated vehicles.

	V-DAC delivers much more of gross revenue to charities than do most other vehicle donation services. In 2003, V-DAC delivered 56% of gross revenue from vehicle donations to nonprofits. The latest Attorney General of California report showed that the average program yielded only 36.7% of gross proceeds to local charities.

	The V-DAC program fully indemnifies non-profits. V-DAC maintains a $2,000,000 liability insurance policy. V-DAC keeps costs to a minimum by duplicating the program used by the largest charities. The vehicles are picked up, sold at auto auctions at wholesale prices and the title is transferred. All of this is accomplished by the company that provides this same service for 14 of the country's 20 largest insurance companies, using the same costs structure. The costs of the program are deducted from the auction price and the net proceeds are sent to the non-profit.
	Program costs Below is a listing of activities common to many Vehicle Donation programs and V-DAC corresponding actual charges for 2003:

		Activities				Cost Per Vehicle

		Program Administration and Operating Costs : Greater of $75 or 10% of sales (average reduced by worthless vehicles)				$39 Average

		Pick-up, transportation and auction fees (Actual costs; no markup)				$80 Avg. for US

		Smog and repair costs (borne by the buyer)				$0


		Repair costs (only done if it will increase net revenue)				$ Actual cost

		Title transfer, call center costs, disposition administration				$55 Fixed

		Additional advertising costs				$0

		Funds distribution and reporting costs (7.5% of net revenue.)				$24 Average

Charities received an average of $250 per vehicle or 56% of gross proceeds under the V-DAC program in 2003. The following are actual examples of proceeds generated with different value vehicles.


		Net Revenue per Vehicle Examples:				Junker			Poor Vehicle			Better Vehicle			Premium Vehicle

		Gross Revenue*				$65			$547			$1,050			$2,750

		Costs

		Program Administration and Operating Costs				$9			$75			$105			$275

		Pick-up, transportation, auction, Title Transfer, and Repair costs				$55			$273			$225			$325

		Funds handling and reporting costs				$1			$22			$62			$181

		Total Costs				$65			$224			$392			$709

		Net Revenue to Charity				$0			$198			$658			$1,968

		Percentage of Gross Revenue				0%			36%			63%			72%

	*	These examples are all positive but some vehicles do not bring in enough to cover the cost of transportation, auction and processing. V-DAC absorbs any losses. There is NO cost or pass-through to the non-profit.

		Timing
		Vehicles are usually picked up within one week of when paperwork is received. (Call if you need quicker pickup.) It usually takes over 2 months from the time the vehicle is picked-up until any net cash proceeds are delivered to the non-profit. The agents at our call center (866-332-1778) keep track of the timing and status of the vehicle in the disposition process.