Simpson with kids from Casa Hogar on March 25 Photo by: Joe Simpson / WireImage

Jessica Simpson was in a giving mood Sunday when she donated a brand new minivan to the Mexican orphanage she supports, PEOPLE has learned.

The pop star, 26, drew cheers when she drove through the gates of the Casa Hogar Elim orphanage in Nuevo Laredo, Mexico, in a white 2007 Chrysler Town & Country and handed the keys to Mama Lupita, who runs the home.

"The kids were cheering when she pulled up," Simpson's rep tells PEOPLE. "They surrounded the car and were so excited to see her. They kept saying, 'Muchas gracias! Muchas gracias!' A few of them spoke English and said, 'We love you, Jessica!' "

Mama Lupita, who speaks little English, was the first to give Simpson a big hug.

"I'm so honored and happy to be able to help," said Simpson, who hugged Mama Lupita and the throng of kids who had waited anxiously to see her and presented her with gifts, including an engraved plaque with a photo of the kids and a beaded necklace they'd made for her.

Simpson laughed when a mariachi band burst onto the scene to serenade her (the kids had saved up to hire the group by selling jewelry they crafted themselves).

"What an amazing surprise!" Simpson said, putting her hand on her heart.

Simpson was there with her mother Tina (who rode in the passenger seat when her daughter drove the minivan onto the orphanage's grounds), her manager father Joe and a few others. Boyfriend John Mayer stayed in L.A.

Last fall, Simpson won a Chrysler Crossfire sports car at a swag suite at the MTV's Video Music Awards, but asked Chrysler to exchange it for a minivan so she could help out the orphanage.

A spokesperson for Chrysler confirmed: "Instead of the Chrysler Crossfire, she decided to get a minivan for the orphanage instead. She went for the Chrysler Town & Country."

The van Mama Lupita had been using for the orphanage broke down last year. She borrowed an old truck from a friend, but that broke down too, leaving her with no transportation for the children.

The seven-passenger minivan even has a DVD player so the kids can watch their favorite movies when Mama Lupita drives them around.