APPROACH TO THE APPRAISED VALUE
The value of a vehicle is often based on several principles. Different vehicles and situations determine the appropriate and useful approach. As a result, the value of the appraised vehicle is typically based on one (or an amalgamation of) the following:
SELLING PRICE VALUE: suggests that the vehicle will be evaluated with sale to a willing (extraneous) third party in mind. The appraiser is well versed in the current values and trends of the local automotive industry. He regularly attends auctions, sales, shows, and events to supplement his knowledge. The assessment of vehicle condition is based on accepted industry standards, and the appraiser targets a price within the range of the marketplace in light of this assessed condition.
REPLACEMENT COST VALUE: must incorporate a variety of factors. For example, the cost to locate, purchase and take possession of an equivalent vehicle must be considered. In light of these costs, the appraiser must determine the availability of a similar vehicle. If equivalent vehicles are not currently available for sale, then educated assumptions are made. Professional search help in locating a vehicle, as well as shipping and potential cross border expenses must also be accounted for in the appraised value. Sales taxes are not included.
INVESTED VALUE: is often based on significant information supplied by the owner, who typically provides necessary proof (documentation) of money invested in the vehicle. The appraiser will inspect the vehicle in order to evaluate/verify the investment. Personal labor cost of the owner is usually not accounted for in the appraised value. Vehicles in this category tend to be highly customized and are often impossible to compare directly within the marketplace. These vehicles usually have a market sale value considerably lower than the investment cost. |
