The IRS distinguishes between two scenarios under the rules established by the American Jobs Creation Act:

If the charity sells the car (the most common scenario), it is treated as a final sale. Your deduction is limited to the actual proceeds the charity receives from the sale — not the fair market value. 

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If the charity keeps and uses the car (i.e., does not sell it), the rules are different and actually more favorable to you. In this case, you can deduct the car's fair market value because the charity is genuinely using the vehicle for its mission — for example, delivering meals, transporting clients, or using it in programs. The same applies if the charity makes a "significant intervening use" of the vehicle before eventually selling it, or if it gives or sells the car to a needy individual at a price well below market value.

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Why does the IRS make this distinction?

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The concern the IRS was addressing was abuse — donors were claiming inflated fair market values on cars that charities immediately flipped at auction for much less. By tying the deduction to actual sale proceeds in most cases, the IRS ensures the deduction reflects economic reality. When a charity actually uses the car, there's no sale price to anchor to, so fair market value is the appropriate measure — and it's a legitimate reflection of the benefit the charity received.

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Bottom line:

If the car isn't being sold, it's not a simple final-sale situation. You'd likely be entitled to deduct fair market value, but the charity must provide you a written acknowledgment (Form 1098-C or equivalent) describing the intended use and certifying the car won't be sold before that use.

As always, I'd recommend confirming the specifics with a tax advisor since the details of your situation matter.