Ask An Appraiser

How to determine a value after a car has been destroyed: Ask an Appraiser

by Dave Kinney
8 September 2023 4 min read
Photo by Stefan Lombard

In addition to benefitting from a trove of data, Hagerty Insider also relies heavily on 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. Though Dave can’t put a value on an individual car in this column (that’s what people pay him to do in his appraisal business, after all), he can field questions about the appraisal process, how to go about buying and selling classics, and the industry as a whole. Have a question of your own for a future article? Ask in the comments section.

Post-mortem appraisals: My car was destroyed in a garage fire last year. There was no insurance, and it was stored at a buddy’s house, so my own insurance company denied the claim. Can I hire an appraiser to estimate the value before the fire? I plan on taking a loss on my taxes.

DK: First off, I’m sorry, as that must really sting. I’ll only answer the appraisal question here and not the tax one—trust me, you do not want any tax help from me!

The quick answer is yes, your appraiser can do a hypothetical appraisal based on photos, receipts, and even by interviewing your mechanic, a friend who knew the car, and possibly even your ex-.
Hypothetical appraisals are even done when the objects no longer exist (destroyed, lost, or stolen) or are in the possession of someone who denies access to the car (again, possibly that pesky ex-).

Many of the appraisers I know have a pretty good radar when they are being sold a bill of goods. Put another way, if the car was as good as all the show-winning examples, why was it never shown? You loved the car as much as life itself, but the only photos you have were grainy ones of only one corner, and it looks like you used a potato for a camera? These are warning signs to a good appraiser that you are attempting to lead them in a different direction than the truth. Work with the appraiser and not against them. You want the most accurate value, unless your plans are other than straight up. I have and will continue to walk from jobs that stink going into them, or start to stink when things get complicated.

stack of paperwork
(Matt Anderson)

What’s up, docs? I recently bought a car where the appraiser missed a bunch of documents that came with the car. When I talked to the seller, he said he didn’t give them to the appraiser because he thought they were not relevant to the value of the car he was selling. The appraiser said it would have changed his valuation. Who is right here?

DK: I really don’t understand why a seller would willfully withhold documents from someone who is trying to find an accurate value of their car. Answering that in the form a question, you might ask why were the documents withheld? My own answer is easy: I would think the seller was trying to lead the appraiser (and the buying public) astray.

Appraisers are not clairvoyants; they can only witness what they can witness. If something is not physically present, people will have no way of knowing. Sometimes repairs and paintwork are easy to find, other times they can be well hidden. Many appraisers use paint gauges to see if the panels are resprayed, there are many cases where a conventional paint meter can give numbers that are misleading or even useless. An electronic meter on a composite or fiberglass piece is one example.

I will normally ask a client for all the paperwork they have with their car. Sometimes, the amount is overwhelming, and I’ll have to triage what is important (a recent valve job) from what is not (a gas receipt from 1998). A complete, solid appraisal is dependent on as much relevant information as is available.

(Matt Dayton)

Who’s right? I’m donating a car and I got two different values from two different appraisers. They are about 15 percent apart. Is this normal?

DK: Yes, this is certainly possible. Appraisers give an opinion of value. One appraiser might choose a different set of market examples (what we used to call comps) from the other. Or one might emphasize a car’s 50-year race history while another makes a bigger deal about its current cosmetic condition.

If I was in this situation, I would get in touch with both appraisers and ask them to review each other’s document. Working together (it’s not a horse race, it’s an appraisal) they should be able to reach a consensus of opinion. If either of the appraisers’ egos gets in the way, this might prove difficult.

If that solution is not going to work, read each of their documents again. Was the purpose of the appraisal listed as “donation” or something different, such as asset valuation? Was the market level “Fair Market Value,” or another type of value? With estate work, Fair Market Value is the appraiser’s only choice for presentation to the government.

Finally, who has the best document, showing the most thorough work and a reasonable result? Fifteen percent is not a lot on a $30,000 donation, but it is on a million-dollar donation. Will the documents be reviewed by the IRS? I don’t know that answer, but I prefer sleeping over doom-scrolling at night.

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  • Gary Bechtold says:

    Best of luck to anyone having to deal with valuation after it is destroyed. I hope no one has to deal with that here.

  • Tjw says:

    No tax write off on casualty loss unless loss was caused by storm or some other storm related event in a federally declared disaster area. Per 2017 tax law changes.

  • Denise Clumpner says:

    First off, if a car means anything at all to an owner they should NEVER take insurance off. EVER. I operate my own appraisal business and even vehicles who are insured by “the other” companies still cheat you in many ways. Most agents that are not specifically trained regarding classic cars will try to sell you a cheap policy giving you actual cash value, stated value or replacement value. None of those should be used on a classic car as it is the COMPANY’S interpretation of those terms, not yours. These companies all do a “take it or leave it” if they total the vehicle regarding your payoff. They will typically offer you a fraction of the value of the vehicle (in Wisconsin, they will only use vehicles as comps in their “territory” which is of zero help to the truck enthusiast who just shipped a rust-free New Mexico truck to Wisconsin and now it has been damaged). Those companies offer you pennies on the dollar for your vehicle and you have no rights to the vehicle if you accept their offer. You are then stuck with a vehicle that was worth far more than they are offering you (appraisal or not) and if you accept the payout you lose the vehicle. The company, in turn, sells it to a third party “wrecking” company that usually fixes the vehicle and re-sells it to someone else with a salvaged title. These companies don’t even come and look at your car in person. They ask YOU to send photos then they hand it off to someone in another state sitting behind a desk who knows NOTHING about classic vehicles. Their job is to frustrate you into settling as cheaply as possible. How to avoid this? ONE: Insure your vehicle at AGREED value. No other wording protects you and your vehicle. TWO: Have your car appraised, verified, properly inspected and photographed by a recommended appraiser. NO, a cheap one page opinion for $50 by some guy at a car show will NOT be good enough. You want someone who takes the time to give you a detailed, professional report. THIRD: Read your policy and go through it every year. YOU are ultimately responsible for what you agree to and pay. It is no one’s fault but yours (sorry) if you are clueless about your insurance. The other guys don’t want to help you: they want your money and the diamond ring they get at the end of the year for legally cheating people out of a fair settlement. The time to get an appraiser is not after the loss, it is BEFORE. A little bit of homework on your part in advance can save you from one of these ugly situations. I always recommend Hagerty to my customers because I have been with them for many years and can vouch for how they treat their customers. One last thing…..if you have not upgraded your appraisal in several years, a good rule of thumb is to revisit the appraised price with your appraiser every few years. If your appraisal is more than 4 years old, you are likely under-insured. Please take my suggestions under consideration as it breaks my heart to tell someone that I can’t do anything to help them (nor can an attorney) if your policy is not what you think it is. Please make sure!

  • Brakeservo says:

    After nearly 50 years in the insurance, and 35 years as a Bentley/Rolls-Royce collector/driver it saddens me to hear that people still believe that insurance companies are out to cheat when settling claims. The biggest surprise to me when I began my career was to hear from my manager “We want to pay what we owe, not too much but not too little either” and I’ve seen that same commitment at many different insurance companies. The problem is one of understanding, and communication but you are correct, a collector car should be properly appraised by a competent appraiser and insured on an agreed value basis. In the event of a loss, there is no question as to what the value is. Insuring a collector car as a daily driver is only asking for trouble if the car truly has collector value and should be avoided.

  • Seattle Antique and Classic says:

    When I appraise a Classic or Antique, I specifically inform the customer be it buyer or seller to NOT give me any of the paperwork, the asking price/offer prior to the appraisal. I don’ ask many questions either, aside from is this the car and do you have the title. It prevents the unavoidable possibility of skewing the value.
    As professional appraisers, we are expected to be experts, so if we’re e inspecting a car, we should be able to clearly assess the car and provide an unbiased value. All the Jegs and Speedwy receipts are tempting to add to the value but realistcally, those parts are worth 2/3 what was paid for them as soon as they are installed. “New” becomes “Newer”. It’s ridiculously easy to inflate the value to somewhere out of sight if you rely on receipts. I note the obvious new parts, look up the current retail and then deduct 20 to 40%, same with labor. Taking the parts and labor markup out of the value will get you very close to the FMV.
    ACV for insurance is the ‘Stated’ or ‘Agreed’ value. This is where you would utilize receipts to determine the value in part. The real key in obtaining a higher stated value lies in the intended use of the vehicle. Insurance companies will insnure for whatever you ask as long as you want to pay the premium. ACV will get a slightly lower premium but if the use is Investment you’ll get a much better premium because the car is being driven very little if at all. If your intended use for your on of a kind Ferrari is commuting, you might have a slightly higher rate, (big surprise there)
    On uninsured total loss, you are in a tight spot, unless youhave very current pictures and receipts. Maintenence receipts aren’t going to cut it either. You are going to be dealing with book value and comps., and the appraisal is only goiong to take you so far.
    I actually had a customer that had a ’68 GT500 and a 2012 GT500KR. Well, there was a storm and the cars were parked in his shop, uninsured when the hillside gave way and both cars were washed about 800 ft. down the hill and totally destroyed, The homeowners didn’t cover it because the shop was not attached to the house. This meant that only the auto policy would cover the damage because they were technically stored ‘Out of doors’. Needless to say, the ’68 got a very expensive out of pocket rebuild and the 2012 KR got scrapped. Read your policy carefully and make informed decisions. An appraisal prior to insuring is a no brainer. Hypotheticals are your option and thy’re not consumer friendly unless they are being used for estimated future value which has a wait date to claim that value. I typically avoid them because on total loss or theft, the insurance company and the appraiser are usually not too far apart as they are restricted by available resources. When I get calls for total loss, I often ask what the insurance is offering. If it sounds reasonable, I check a couple of book values and a couple of sales, then advise the client to take the check most of the time and save their money on the appraisal.

  • Dave Dunfee says:

    I totally agree with getting an appraisal prior to filing any claims . Where or how do I find a “qualified “ appraiser in my area ? Would I just ask my regular local insurance agent for a name . Or should I contact Hagerty for someone local ?

  • Chris Pianto says:

    I really wish somebody would address the issue of a salvage title after the car has been determined as a total loss. I want to keep my car and fix it as it was under insured. However, I will have a salvage title, and the value will be greatly diminished. Trying to figure out if I should take insurance money or not and sell it with a clean title after his properly repaired.

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