PART 2 of 3
Creating a cash value car appraisal
If you rely just on the asking price or sale price of a couple vehicle listings you printed off the Internet, you could be making a big mistake and miss out on several thousand dollars of extra cash for your total loss vehicle.
Remember the auto insurance company has a full appraisal report backing their cash offer. How convincing will a couple Craigslist ads be by comparison? For this reason having your own vehicle appraisal supporting a higher payout is critical.
Selecting Comparison Vehicles
The easiest place to find and select comparable vehicles to appraise your car is from online sites such as Autotrader, Craigslist and other sites that list ads for vehicles. You are looking for vehicles that would be considered "replacement" vehicles. Now this does not mean they are identical vehicles, they are vehicles that are similar in age, make and model. If you are finding it a challenge to find similar vehicles online, don't forget to check the classified section on local papers. Once you have at least three similar vehicles, you will have to make price adjustments to each comparable to account for differences between the comparable vehicle and subject vehicle.
Car price adjustments
The asking price or sale price of a comparable vehicle is not the "adjusted price" used in comparison and selecting a final value for the subject vehicle.
There are many items that require the original asking price or sale price of the comparable vehicle to be adjusted either upward or downward. (You never make adjustments to the subject vehicle being appraised)
For example the most common items on a comparable vehicle that require an adjustment to the original price are:
- The OBO (or best offer) if you are using an asking price as your starting point
- Options such as power windows, air conditioning, etc.
- The condition of the exterior and interior
- Differences in the odometer reading
- Differences in year built (at times you will only find vehicles that are a year or two older/newer)
Of course the number of items that require adjustment are more than listed above.
Warning: If you adjust your comparable vehicles with "inflated" adjustments to get a higher final value your opinion of value will be disregarded. You are dealing with professionals here and they will spot these type of shenanigans immediately. So it is critical you apply reasonableness when making adjustments and don't pad the adjustments to get a "higher" than market value outcome.
Vehicle value comparison conclusion
Once you have three comparable vehicles and adjusted their asking price or sale price, you will have a range of adjusted prices from the lowest to the highest. Your next task is to determine where the value of the subject vehicle falls within this adjusted price range. You should pick the best comparable of the three and use this as your guide to determining a final value for the subject vehicle.
The next step is to write a justification on your final opinion of value based on the adjusted price evidence you provided (comparable vehicles). The goal with this part is to lead the reader (insurance adjuster or arbitrator) through your thought process in how you determined the final actual cash value based on your analysis of the three comparable vehicles. Finally, state your conclusion for the subject vehicle.
In part 3, I will cover what to do if the auto insurance company refuses to pay you what your vehicle is worth (the value before the accident).
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