- Why can’t I have my friend, mechanic, or club member appraise my car?
Anyone can set a value on a car BUT.. will it stand up to a challenge? Some insurance companies are well known for challenging vehicle values when a claim is made.
It does not matter if they accepted it when you bought the insurance or that you have been paying a premium on the value. It is easy for an insurance company lawyer to
challenge any value set by anyone who may have any possible conflict of interest. This is not uncommon and many agreed or specified values have been challenged in court and
the car owner has lost, allowing the insurance company to set any value they want. To avoid this, it is important to use an independent Certified Vehicle Appraiser
that only does appraisals. Appraisals by people who are associated with firms that buy, sell, restore, transport, or repair vehicles opens the door for having the
value challenged!
Even having a club member, show judge or other person familiar with your car does not mean the value will not be challenged. The person setting the value must also have
considerable credentials and experience in setting vehicle values. To date, our Certified Vehicle Appraisal has never lost to a insurance company challenge.
Many values set by others have been set aside.
Don’t take the chance - Get a Certified Vehicle Appraisal.
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- Is the appraisal's fair market value what I can sell my car for?
Not necessarily. The fair market value is based on sales of vehicles like yours in the overall market. The point of a fair market value is to set what it would cost
you to replace your current vehicle with one similar and in the same condition.
The price you can sell your vehicle is based on what someone is willing to pay for it as illustrated by the prices at some of the auctions. Many cars sell for more OR less
than the fair market value at the auctions. The value of a Certified Vehicle Appraisal is that it sets a documented value point based on the condition of your vehicle.
This gives you a starting point to determine the price you wish to sell the vehicle for and make it in line with the market place.
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- Is the value of my vehicle the same as the auction prices?
No, Not Really! If you have ever attended or seen the big auctions on TV, you can see that some vehicles sell at prices way beyond what the average sales price would be.
This can be due to many reasons such as “Auction Fever”. Go to any type of auction and watch what happens when 2 or more people seek to win an item.
The real market value goes out the door and egos and competition take over. Also, the condition rating of the vehicles at the auctions are not posted so it is impossible to
determine what condition rating really is. Also note, that auction information is what was given to the auction house by the owner and is NOT verified!
Auction prices can have an impact on the fair market value when a trend appears like the
past “HEMI” prices but remember, auction prices do NOT set the market values.
The market values are determined by the actual sales as reported to the various pricing guides. A Certified Vehicle Appraisal is your best guide since it sets the fair market value
and documents the condition based on the definition set by the industry.
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- What are condition ratings?
Condition Ratings are definitions of the car’s condition as set by the pricing guides. They vary a little from pricing guide to pricing guide, but overall, they are fairly
standardized on the 1-6 rating. Briefly, a #1 car is a concourse level show car that is not driven. A #2 car is a show car, not of #1 condition but is driven usually less than 1000
miles a
year and can compete for top honors if a #1 car is not present at a judged show. 95% of the cars at shows and cruise-ins are #3 condition. These cars are driven and may show some
wear when closely examined. They usually look very good from 20 feet or so away, but close inspection shows imperfections or wear.
A #4 car is a car that even from 20 feet away, needs restoration. It usually is a “driver” that someone really enjoys. It is complete. A #5 car may or may not run, needs a total
restoration and all the parts are there. A #6 car is a parts car. To see a sample list of ratings, go to
http://www.firsttraderegistry.com/old_cars_price_guide.htm
.
On a Certified Vehicle Appraisal we have further define the condition ratings to include a + or - rating (I.E. 2-) to expand the condition codes even further.
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- I put $60,000 in my restoration, isn’t that what my car’s value is?
Unfortunately no! The value of your car is based on the condition, the current market value, and demand. The condition determines the value so an excellent restoration
will have a higher condition rating and therefor be worth more. Don’t be discouraged because the financial investment can make a big difference to a potential buyer.
This is only true if it is documented. It’s not the amount of dollars spent but how the investment increases the vehicle’s desirability.
To some buyers a beautiful purple metallic paint job may be just what they wanted and other buyers who are looking for originality only,
the paint decreases the value in their mind. The value of your car is based most on what someone will pay for it. Sometimes you can recover all or most of your investment, but,
for example, putting $60,000 into a car that has a market value of $10,000, will not recoup your investment. The real key is if you enjoy the car,
then nothing is more important.
We’ve seen many cars that the money spent will never be recovered, BUT, the owner loves his/her car and drives it often, Having a Certified Vehicle Appraisal that includes the listing
of documented investment will help you to potentially get a higher price from the “right” buyer.
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- Why do I see some appraisers have licenses and others do not?
At this time, we are unaware of any state that requires a license to perform any type of value appraisal. Some appraisers that publish that they are licensed are actually
physical damage claims adjusters serving the insurance industry. Claims adjusters do have to be licensed. The key point for you to know is that having a license for claims, does not
indicate any expertise or experience in valuation appraisals of antique and collector vehicles. They are more familiar with late model cars and the cost to repair them.
We only do valuation appraisals and are active in the hobby. They have some of the same type of cars you do, are active locally in car show and cruise-ins,
are members of national organizations and car clubs, and are National Judges for the Antique Car Club of America.
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- What are the questions I should ask when choosing an appraiser?
Anyone can “claim” to be an appraiser. There are certain qualifications you should look for. These include but are not limited to:
1. What is the appraiser’s experience in doing appraisals?
2. Is the appraiser active in the hobby?
3. Is there any possibility that a conflict of interest could be claimed by the insurance company?
4. Is the appraiser an active judge in major shows and meets?
5. Will the appraiser stand behind the appraisal if it is challenged by the insurance company or in court?
6. Look at a sample appraisal. How detailed is it and the pictures taken? Does it look professional?
7. Is the appraiser a member of a national appraisers organization with additional resources available?
8. Does the appraiser do any work (appraisals or damage claims) for any insurance companies?
9. Is the appraiser familiar with your particular vehicle and if not, where would he/she get the data needed to do a proper valuation?
If you answer “no” to any of the above, look around for another appraiser.
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- How often should my car be appraised?
The insurance industry suggests you have your vehicle appraised every 2 years or 10,000 miles, whichever comes first. You should also have your car re-appraised if you have added
value to it in any manner. The collector car market is in a constant state of flux and often a certain type or model has more demand than supply or simply becomes “hot”.
Keep your eye on the market values and if you see several similar cars jumping in value, it is time to get your car re-appraised.
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- My car is under restoration (or in storage), do I need insurance?
YES!! Your homeowners policy DOES NOT cover your vehicle. For a minimal amount you can purchase comprehensive coverage for your vehicle from any firm that insures collector cars.
You should have at least enough coverage to protect your investment AND update the value often as the value of the vehicle increases due to work that has been done to it.
Several classic car owners lost very valuable cars in the California fires, Hurricane Katrina, and local fires.
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- What happens if my car is underinsured and I am in an accident?
This can be a major problem. Recently a 1966 Corvette was in an accident and had $25,000 of agreed value insurance... way below the real value. The estimate to repair the car was
$27,000. The actual fair market value was $35,000. The owner received $20,000 and the car was totalled. He would have received almost $30,000 if he had a current appraisal on file.
He lost over $10,000!
Sometimes we can appraise a vehicle after an accident to determine the value before the incident. This can be very difficult depending on the damage.
It is impossible to comment on important value points such as fit of the panels after it has been damaged. Doing a Pre-Accident Appraisal is the last resort to avoid an insurance
company determining your car is a total loss. The value they will use is 80% of the agreed or stated value. If the damage is more than a certain percentage of the value, they will
declare it a total loss and it will not be fixed.
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- What do I do if my insurance company challenges the value when I file a claim?
A Certified Appraisal is your best defense. If the value can be challenged, some firms will do so. This is especially true of situations where the owner has set the value or
had had an appraisal done by someone who could be considered having a conflict of interest. The value should be set by someone who will stand behind it in court if necessary and
maintain the information that was used to set the value. It is very rare that a professional appraisal is challenged but it does happen if they see an opening. A Certified Appraisal
is rarely challenged and if so is even more rare to go to litigation.
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