When you hear the word “appraisal,” the first thing that probably comes to mind is real estate. You may have never considered that cars need to be appraised. But it’s true! There are a variety of reasons why automobiles, from brand-new trucks to antique cars, may be evaluated by a professional appraiser. Here’s what you need to know about valuing cars.
Why Do Cars Need to Be Appraised?
There are many reasons why a car’s value may need to be appraised, including many reasons related to finances. Maybe you need it for insurance purposes or to determine estate value. Maybe you need your cars appraised as part of your divorce settlement.
One of the most common reasons why a car must be appraised is to determine diminished value. This comes into play when a car has been in a third-party accident. In other words, damage has been done to a car in an accident that wasn’t the fault of the car’s owner. You can get the car repaired, but even then, a car won’t have the same value it did before the accident.
A professional auto appraiser will conduct a thorough evaluation to determine what the value of the car is now and how that compares to the car’s value before the accident. The car’s owner is entitled to compensation from the third-party’s insurance because of the loss of value.
What Vehicles Can Be Appraised?
There’s really no limit to what kind of vehicles can be appraised. As long as it has a VIN, it should be able to get appraised! Some of the vehicles that may be appraised include:
- Classic cars
- Antique cars
- Golf carts
- Electric cars
- Brass Era cars
- Brand-new cars
The process of valuing cars doesn’t vary much depending on the type. However, as you would imagine, the types of things you evaluate change depending on the type of vehicle. For example, an electric car will obviously be appraised differently than a gasoline car.
What is the Auto Appraisal Process Like?
The process for appraising a car varies a little depending on the purpose of the appraisal. An appraiser’s goal is to evaluate every aspect of the car’s condition. They will measure the paint thickness, which will reveal if there’s filler or Bondo in the car. The information gathered from the evaluation goes into a comprehensive 12-page form.
Each aspect of the vehicle is evaluated on a scale of one to five. One means the quality is poor. Five is the gold-standard among cars. It’s the kind of condition you’d see in a car that’s never been driven and has only sat in the dealership. As you might imagine, it’s pretty rare to get a car that earns a five on any of the criteria.
Next, the auto appraiser takes between 100 and 200 photos of the car. The photos and all the information gathered in the forms are then compared to other cars in similar conditions. All of these steps ultimately lead to putting a number on a car’s value.
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At Cape Fear Family Law, we guide our clients toward a safer, happier future. We provide legal advice for divorce, estate planning, financial planning, and more. Contact us today and let us know how we can help you.
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