Ask the Appraiser

When do you need to call an appraiser?

by Dave Kinney
21 March 2022 4 min read
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These days, anyone can look up the value of a 1968 Ford Mustang GT. But if there are special circumstances—say it was driven by Steve McQueen—you might want to call an appraiser. Photo by Sabrina Hyde

In addition to benefitting from a trove of data, Hagerty Insider also relies heavily the expertise of veteran market watchers, including Dave Kinney, appraiser and publisher of Hagerty Price Guide. In this column, he will answer often-asked questions about collector car values and buying and selling. Have a question of your own? Ask in the comments section.

For this installment, Dave starts with an elemental but often misunderstood aspect of the business:

What is a classic car appraiser, and when do you need one?

Even though my “day job” is being an appraiser, I always felt the collector car market would be better off if more people had a basic understanding of what things are worth, which is why I began publishing a little guide. That book—today known as the Hagerty Price Guidehas helped democratize information about car values. The proliferation of online auctions where experts often weigh in on car values in realtime, along with publications like the one you’re reading, have the same effect. Today, even a casual observer can get a pretty good sense of what a particular vehicle is worth.

Appraisers, however, still play an important role whenever “pretty good” isn’t good enough.

Simply put, an appraiser’s job is to estimate a value of something—art, houses, businesses, jewelry, you name it. “Something” didn’t seriously include collector cars until the 1980s—around the time headline-grabbing sales like the Harrah’s auctions alerted people to the fact that old cars could be worth serious money. Don Peterson, who passed away last September at the age of 92, didn’t quite invent the genre but is one of the best known from these early days.

In those dark ages of what we’ve come to call the collector car market, a trusted appraiser had a major leg up on the typical observer. Very few people in this time followed collector car values, and those people generally focused on prewar metal because that was where the big money was.  

Today, appraisers like me get called in when variables throw off a standard valuation. Sometimes, the variables have to do with the car: A price guide can tell you how much to ask for your 1968 Ford Mustang. If it turns out that Mustang was driven by Steve McQueen, or has documented extreme low miles, or has unusual colors or options, you probably want to call an appraiser. Other times, the variable has to do with your life, particularly the sort that involve contracts and lawyers—divorces, estate planning, sales of entire collections.

The actual appraisal process is straightforward. We often look for what is known as a Market Example (or what was until recently referred to as Market Comparison) approach. In other words, the approach using comparables or “comps.” The two other possible approaches to valuation are the Cost Approach (very recent restorations or Resto Rods are two examples) or the Income Approach (how much money does the car make for you; this one, obviously, is quite rare with collector cars).

An appraisal must be for a specific purpose, and work toward a type of valuation. Think of it this way: that 1968 Mustang we referenced above, just like your car, has more than one value, depending on the circumstances driving the appraisal. There are, for instance, specific considerations behind the value of a charitable donation or for a collection that’s part of an estate. That said, the most common valuation used is “Fair Market Value”, and with few exceptions, that is what most courts and government entities demand (think taxes and divorce).

No matter the specifics of the appraisal, it’s important to keep in mind that they are an opinion of value—nothing more and nothing less. That opinion should be researched and documented, with the valuation findings detailed in the appraisal document. An appraisal is not legally binding until a court, judge or other legal entity such as a binding arbitration says so.

Before you hire an appraiser, it’s important to, well, appraise them. In most jurisdictions, there is little regulation guiding who can call themselves an appraiser or, for that matter, a “certified appraiser.” Certified by whom? It’s up to you to look into accrediting organizations and to compare credentials. There are large, multidisciplinary appraisal societies who have continuing educational requirements, as well as small, self-credentialing groups that have adopted some of the language of the big groups. There are independents who do not belong to any credentialing or educational appraisal organizations.

Ask your friends or colleagues about appraisers they know, or even better, have used. Was their work professional? Well thought out? Did it answer the value question asked?

Look at their website for credentialing information. Do they offer information about their services and possibly normal costs? Is their work done confidentially? Can you call their office and ask questions about their process, record keeping and costs? Are they well known and respected in the hobby? Do they attend related events, and keep current with the market and its continuing changes?

Keep in mind that the costs for an appraisal will rise if travel is involved. Not a big deal if the collection is 10 or more cars, but it could be a deal-breaker if the job is just one or two vehicles.

Finally, look for the red flags. If they brag about being the best, their long list of clients, or make other unverifiable claims, you might wish to look elsewhere.

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Comments

  • Jim Rosenthal says:

    Is it reasonable to ask about how many marques and time periods of manufacture an appraiser can be expected to be familiar with? Most ads for appraisers seem not to mention specific brands or periods of automobiles.

    • Joe Troise says:

      Professional automobile appraisers are by nature generalists. It is not necessary for them to be experts in a particular make of car; however they should be experts and how to find all the information they need to produce an accurate appraisal. The professional appraiser often calls upon a large network of experts for a consultation. His job is not just to generate a value, but to justify it with meticulous evidence. In other words his methodology is as critical as his knowledge about Classic. Cars. There is really no substitute For experience. The professional appraiser in effect goes through a lifelong apprenticeship, always learning, always improving, and most important always looking out for the best interest of his clients

  • Rick McCarty says:

    I have never used a automobile appraiser although there was the one time I should have. But I did hire a marine surveyor once (Appraiser) that saved me from making a huge mistake and was well worth the money.

  • Pete McNulty says:

    Had a buddy that called an appraiser for his Porsche 912. The appraiser was pretty clueless, asked a lot of questions and my buddy quickly realized that he knew more about the 912 and the market than did the appraiser. Appraiser then said he’d do some work and get back to him in about a week, he had to go of next to appraise a piano. Was a waste of $$$. Better guys than this I’m sure.

  • Howard says:

    Anyone investing with a classic/antique collector automobile/truck/boat, should “DEFINITELY” have a professional appraisal done, to evaluate the item.
    Picture this: you buy a classic automobile; for exampl, a 1967 Ford Mustang fastback. The car appears to be a number 2 level restoration. You pay $50,000 for it. The appraiser, who is extremely competent, and experienced, has an appraisal value of $58,000. This will be the value that your premium should be based on.
    You have an incident, and the car is totally demolished.
    Your insurance company has based the premium and coverage, based on your purchase price. However, when the damge estimator, from the insurance company investigates, he instructs the insurance company that, because it is that old of an automobile, the scrap value is $1,500. This is the recommended settlement.
    If you have registered your professional, acceptable appraisal of $58,000, with the insurance company, and your premium is based with this, your settlement will $58,000. They, and you, have the legitimate proof of value, to factor the loss.
    EVERYONE SHOULD OBTAIN A PROFESSIONAL APPRAISAL, REGARDLESS OF THE CONDITION!
    If you improve the automobile, and this increases the value, have your appraiser make the appropriate adjustments, and inform your insurance company. Otherwise, this will not be covered.
    If you modify the auto, inform the insurance compay, as well. This could have a definite change of your coverage.
    Validate the appraiser that you are considering. Some are honest and well experienced; others will give you the appraisal that “YOU” want. Insurance companys are not fools. They know what they are doing!
    Use your brains, and common sense. This is what insurance is for!
    Enjoy your ride!

  • Tim Richardson says:

    I want to Market my 2007 Shelby SuperSnake Convertible It is Orange/Black Interior. It has approximately 7400 miles and I am the Second Owner My understanding it is one of two in America. Also has new tires and has used Ford Synthetic Oil from New

  • ERNEST MACEWEN says:

    The best insurance for your classic car is an agreed value policy. Some insurance companies will sell you an agreed value policy without appraisal but the appraisal is better for the car owner. In the case of agreed value insurance if the car is totaled the car owner gets the agreed value less the deductible.

  • Dave Johnson says:

    Unless your insurance company requires an appraisal I don’t see the point of an appraisal. For me just watching BAT shows me the value of my collection. I am 71 years old but in good health. One of my sons is a car guy and if anything happened to me he could clean it all up. My big problem on the current inflated values of most collector cars is when will it all crash.I believe a rare and coveted car will always retain its value. The big issue is owning a high dollar car that has doubled or more in value under your ownership. If sold capital gains tax could really mess up your financial plan. Just something to think about!!!

  • John Layzell says:

    Thank you, Dave! Good comprehensive article! As with any valuable possession, protect your property! Get it appraised!

  • joseph Shelby says:

    I have questions regarding originality. The Price Guide takes most things in consideration but no premium seems to be added for originality.

  • Duckie60 says:

    No one has mentioned appraisals for loans to buy said automobiles. No being independently wealthy, I have to go to my Credit Union for a loan. They require an appraisal. The problem arises when what you are looking to purchase is across the country, or in another country. I’m currently looking to purchase a Packard, plenty of photos on hand of the car in it’s current state, but the costs for an appraisal I’m being quoted in that area are 15% of the asking price! The Credit Union won’t even talk about it without the appraisal.

    • John Layzell says:

      Unless you are looking at a Packard for >$3,000, no way should an appraisal be 15% of the asking price! Depending on location, vehicle type and appraiser, appraisal should be in the $400-500 range.

  • Bobby says:

    I have a 1972 455 HO GTO ,It has a W62 pkg. with a turbo hydramatic tranny .ram-air, (no emission control added to this one). Starting price of $2,850.60 + options = $5,382.60, one owner,#’s matching. I think I need an appraiser to decide if I rebuild & add horse-power or go back original. Any advice welcome good advice appreciated. Live in North central Texas’

  • jane don says:

    How likely is an appraiser going to take into consideration Where you live? In a warm dry climate there could be 10 times the amount of say Mustangs (making then Less valuable) than in a wet snowy area where they are Rare– I’ve met insurance company “Appraisers” who just call Classics “Old Cars” look up what’s been sold lately by”” New”” car Dealers (who rarely take in Decent classics) & have taken in a rust bucket & sent it to the junkyard & these “Appraisers” say the junkyard price is the value of your car–

  • John Robertson says:

    Thanks for an excellent article Dave, and thanks also for the very informative livestreams. Where I am based, we have government-sourced basic insurance, and can add Hagerty Agreed Value on top of that. In many cases, clients call me for an appraisal as they want to document the vehicle’s condition before a terrible event happens, for fear they will be offered a very low amount, especially if the vehicle is modified or unique. We are in a owner-beware situation, where it is much wiser to be prepared ahead of time, and they also have the peace of mind knowing they’ve done what they can to protect their investment. The non-Hagerty situations I have helped with, where there wasn’t an appraisal, were upsetting and stressful for the owner. The ones I hear about where Hagerty was involved have gone much more smoothly, and having an appraisal ahead of time can still help smooth the claim process.

  • 95Mustang_Rob says:

    Hello everyone. I am in a bad situation. I had a 1995 Mustang GT with a lot of work done to get it to the shape it was in. The parts alone costed me close to $13,000 over the course of 3 years. I have been in several local car shows and every time I have finished with a First Place Trophy and it was recently selected to receive a special memorial award for the best 1994-2004 Mustang in the show. This is the second year that award was given out and is only received by one car per year.

    The Hagerty valuation tool shows values of about $13,000-$27,000 depending on the level of show it could enter and place in. When using that information along with the current value of other cars that are a close match to my car in a 100 mile radius the car is worth about $22,000-$24,000. On 05/13/2021 I was driving home when a guy drove threw an stop sign without ever hitting his brakes causing a total loss accident for both cars. He admitted fault and now the insurance company will be sending out their “appraiser” to get a value of my car. However, I know they have already looked at the Kelly Blue Book (KBB) for the car with intentions of using that value and the only reason they are going to the car is to look from a distance and say, “Yes, this is a total loss” then get the car moved to stop paying storage fees.

    I tried to get the classic car insurance, however I was told I had to have a garage before I could get that insurance. So I took steps to get a garage built. Who can someone call, in southwest Virginia, that is certified to appraise classic cars for a company like Hagerty or other antique car insurance company? I cannot loose so much money on something I loved and worked so hard on. What can I do to help prevent this from happening?

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