Street Rod Appraisals
Often it is necessary to have an appraisal of your street rod. Appraisals will give you an accurate and precise value of your street rod.
Reasons for Getting an Appraisal
There are several important reasons to get an appraisal for your custom car, street rod, collector car or classic car. These may include:
1. To determine the sales tax valuation when you register your vehicle. In many states, the price of the vehicle
license depends upon the value of the vehicle.
2. To determine the diminished value of your vehicle after an accident.
3. To determine the value so you can be reimbursed for your car after a natural disaster, fire, or other
circumstance in which the vehicle was destroyed.
4. To determine the value of your vehicle if it has been stolen.
5. To determine the value of your vehicle for insurance, financing, or for legal purposes.
6. To determine the value of your vehicle after a divorce settlement or for estate settlements.
Certified Appraisers
There are many companies that can provide the necessary appraisals for your vehicle. Make sure the company you select can provide certified and trained appraisers. These appraisers provide a report on your vehicle that includes such values as the Fair Market Value, Replacement Value, Actual Cash Value and Diminished Value of your vehicle. This appraisal report will also contain numerous photos, and a list of components and special parts such as signature wheels, fuel injection, shaved door handles, special sound systems, removable hardtop, etc.
Types of Values
Fair Market Value: A term often used in the appraisal business is called the “fair market value” of a vehicle. This is defined as an estimate of the market value of the vehicle. The value is based on what a willing, unpressured and knowledgeable buyer would most likely pay to a willing, unpressured and knowledgeable seller of the vehicle.
Replacement Value: Replacement value refers to the amount of money that an insurance company would pay to replace the vehicle at the present time, according to its current worth. This type of value would be important if the street rod were stolen or were totally destroyed by a fire or other natural disaster. Replacement value is designed so that the owner will not have to spend more money to replace the vehicle under these circumstances.
Actual Cash Value: The cash value is different from the replacement value in that the value of the vehicle is been reduced by depreciation (wear and tear, age, etc.). The actual cash value may change daily. It is determined by the condition of the vehicle, (excellent, good, fair, or poor), the mileage of the vehicle, and the make, model, age, (features) of the vehicle. These are all items that are part of the depreciation of the vehicle. For example, a vehicle with high mileage will be worth less that a vehicle with low mileage. The actual cash value is determined by subtracting the depreciation from the replacement costs. This is often used when selling a vehicle rather that replacing the vehicle.
Diminished Value: Another term used in the appraisal business is called the “diminished value” of a vehicle. This term is associated with a vehicle that has been in an accident in the past and is for sale. When a vehicle is in an accident, even if it has been completely fixed, it still isn’t worth the original value before the accident. It is estimated that between 50-60% of consumers won’t buy a vehicle after it has been in an accident even if it has been repaired correctly. In fact, more that 80% of the people would expect to pay a lower price if it has been in an accident.
For example, say a vehicle is worth $40,000. Then an accident occurs. In this example say there was $10,000 worth of damage. The insurance company pays the $10,000 (minus the deductable). Is the car now worth $40,000 again? Not really. This is because if a buyer knows that a vehicle has been in an accident, the value of the vehicle is diminished. The buyer expects to pay less that the $40,000 because the car has been in an accident. The value of the car has been diminished because of the accident.
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