Getting the Most Out of Your Car Appraisal
Cars are much more than a way to get from point A to point B. Along with your home, your car is likely one of the most valuable assets you own. Because cars' values can change over time, getting an accurate car appraisal is necessary if you plan to sell your vehicle.
When to Get a Car Appraised
While selling your car is the most common reason for getting a car appraisal, people may also get their cars appraised because they are:
- applying for a loan and want to use the car as collateral
- buying or selling a car
- getting a new insurance policy (Owners usually get an insurance appraisal to determine what their rates will be.)
- importing or exporting a vehicle
- restoring a vehicle
- settling an estate.
Choosing an Appraiser
When you’re looking for a person to appraise your car, you can find credible appraisers through:
- A car owner you trust: Other car owners can give you their honest opinions about appraisers with whom they’ve worked.
- The Internet: You can get quotes online or schedule an appointment with an appraiser from many Web sites.
- Your own insurance agent: Insurance agents may be able to point you to reliable appraisers they have used in the past for insurance valuations.
Before hiring an appraiser, meet a few of the candidates you are considering. Make sure whoever you’re considering for the job has had experience with your particular type of car and has plenty of appraisal experience. Asking for references is also recommended, as other clients' experiences can help you find out what to expect.
The Car Appraisal Process
Once you hire an appraiser, he will need to look at the car to see:
- how the car runs
- what (if any) damage has been done
- what repairs or improvements you’ve made (if any).
From here, the appraiser determines the value of a car using one of two types of appraisals:
- Actual Cash Value Appraisal: Also called a Fair Market Value or Replacement Cost appraisal, this type of car appraisal is very similar to home and antique appraisals; An appraiser tells you the amount of money for which your car can be sold.
An actual cash value appraisal takes many things into consideration, including how old the car is; if there was custom work done to a vehicle and who performed it; if the car has been featured in the media or won any awards; the make and model of the vehicle; and what sort of changes have been made to the car.
Because a number of factors affect a car's value, keep good records of these things to show the appraiser before he inspects your vehicle.
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Diminished Value Appraisal: This second type of car appraisal is used when a car has been damaged. When a car is in an accident that has resulted in frame damage, it automatically decreases the car's value by half. The reason for this decrease in value is that dealers will not or cannot sell the car to someone else due to safety issues and possible future problems the car may have. Additionally, private buyers will not want to pay as much for a car that maybe shouldn’t have been repaired (because the car isn't worth it).
In a diminished value appraisal, an appraiser considers the make and model of the car, the repair work that was needed and whether or not any original parts were replaced. The diminished value is the difference between what market value listings say the car is worth and what it can actually be sold for at the time of appraisal.
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