i would definately call the police and animal control in your area to report your neighbors. They should be fined for what they did to the puppy. They cannot keep a dog outside without proper housing and food. Also you said it got hit by a car so they are neglectful of it as well because i'm sure they didn't seek medical attention for it.
if you don't want to relinquish it to the shelter tell them that you will keep it and find it a home, or you can call a resuce. But keep in mind that labs are very popular and it may be hard to get him into a rescue. If that's the case, a no kill shelter would be best if you can't keep him.
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