The term "Appraised Value"

This forum is for discussion of those terms we see in car ads and articles that can be misleading, misunderstood, or misused. The goal is to arrive at definitions we all can agree upon.
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Barry Wolk
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The term "Appraised Value"

Post by Barry Wolk »

What is an appraisal? To me the word has become meaningless. There is a '78 Mark V with 77,000 miles and a dirty engine compartment on e-bay that the owner claims was appraised at $45,000. :shock:

The NADA book shows a value of less than $10,000. If appraisers are making these kinds of mistakes the buyers are the ones that will eventually get hurt.

Case in point. I'm trying to buy a naked top Mark III. The new owner bought the car 10 years ago at the value set by the appraisal that was paid for by the car's old owner. He paid $18,000 for it and wants to recoup his cost today. Tough nugs.

Turns out he's a victim of a bad appraisal and he's trying to pass that on to me. Don't fall for this trap. Just because it is written doesn't make it so.

When I insured my Mark II I got an appraisal that was almost three times what I paid for my car. I was asked to tell what I thought the value was but I refused. I didn't want to skew the process. When it came back at three times what I paid I became nervous that I had significantly underinsured it and increased the level of insurance.

My concern is that the appraisers are pandering to the insurance companies which benefits them because of increased premiums with no increase in risk. It also seems to create false values. Enouh false values and the bubble will burst as it did with Ferraris.

Your thoughts?
'56 Mark II convertible, '51 Royal Spartanette, '56 Chris Craft Continental
'68 Lincoln Continental Limo, '77 Town Car, '55 356 Porsche Continental cabrio,
'69 Mark III convertible,'88 BMW 750iL, '88 BMW 325iX, '97 BMW Z-3, '98 ML-320

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Dan Szwarc
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Post by Dan Szwarc »

Appraisals are utter bullshit.

I always like to say "It is worth NOTHING if you do NOT have a buyer." Because who will give you that $18,000? No one.

When a house doesn't sell, they lower the price. I always tell people to make an offer and walk away. If the seller hasn't receivd any offers, he may consider yours.

Barry, if the appraisal is 3 times what you paid, then do you really want to pay insurance rates for that higher value? They could be a two-thirds lower and you will still get your money back if something happened.

Obviously, more than one appraisal is needed, much like more than one quote is needed if you are having work done.
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Post by Joe Nemec »

The seller of that 69 Mark III did (not) pay $18,000. for it ten years ago. I sold My 71 Mark III ten years ago ,Black on black with factory sunroof the condition was better than the 69 on Ebay now. I had it listed in the Los Angeles Times for sale, not one offer... I ended up selling it for $1000. it was very sad, I had put in 10 times that amount in keeping it new and that was in the 18-months before selling it. The Mark III did Not sell for a lot of money ten years ago...
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Post by Patrick783 »

Joe, i understand wy you are feeling sad about that.
After so much efforts to make the car almost brand new, it is not fun to sell it for only $1000 dollars.
Your investment in the car, was at the end almost wasted money, wat i say, is wasted money.
You never had the change to earn that money back on your car.

I think that i never would sell that car for a price like that.
The owner from the car now, have a perfect running, and in very good condition car now.
The car have also a sunroof in it, wat difficult is to find.
So i think that that car is now more money worth, then it was ten years ago.
It is a shame , wat potential byers want to pay for a car, atleast when i thinking from that $1000 dollars.

Patrick.
I own a 1971 Lincoln Continental Mark III, it is a very pretty good and awsom car.
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Post by Joe Nemec »

Yes Patrick, You are so right. the prices of the 69-71 Marks are worth more now than ten years ago, and the buyer did get a great Mark III

It makes Me think of what I have in the 76 Mark now, much more than what I could get for it however, the market has been known to change.

then again, It will never be for sale, so it matters not...
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Post by Patrick783 »

I will never sell the Mark III, never.
Because the car is very special for me,not only the color in this case.
The car is also the same age, the car and me.
And i like the car for it s body lines, design.
I own a 1971 Lincoln Continental Mark III, it is a very pretty good and awsom car.
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Post by toddallen »

This happens in all markets. I cannot tell you the amount of people who come to me at work and want to refinance their house with an inflated appraisal in hand. There are appraisers out there that will tell you just what you want to hear, unfortunately they have plenty of business since the real estate community and owners do not care that the piece of paper is worthless.

Are there any credentials or associations that car appraisers get that actually mean anything to a consumer?
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Post by Stuart M. Cohen »

I would think that one would want a high appraisal for insurance purposes to protect your investment in the car in case of loss.

As an example, Barry, the appraisal came back three times more than you paid for your car. If the car was severely damaged, what would it cost to repair it to the condition you have it? Or, if it was totally destroyed, what would it cost to replace it? Could you even find a replacement? Since your car is pretty much a one of a kind, if you paid $100,000 for it when you got it do you think the car is worth $300,000. I'd say so for such a rarity.

In my case, it probably would cost the insured amount to replace my car; either spend money for the car and fine tune it or get a cheap one and put all the work into it. Do I think my car is worth the $70,000 it's insured for? Sure do. Last year it was a 97.33 point car and this year it should pull over 98. Next year, when I get my show tires, I'm hoping for a 99 point car. That's why I think my car is worth that much. Try to find a 40+ year old car that looks like it did when it rolled off the assembly line.

I don't want to sound cocky or anything, but I feel that way about any car in that kind of condition. Personally (may be a bit off topic), I'd pay $100,000 for a mint condition 40 or 50 year old car than a modified car of any type - not that I have $100.000 to spend.

Unless the kids want to work at Mc Donalds instead of going to college. :D

Having said all that, Dan is 100% right. Assuming you do want to sell, it's only worth what someone is willing to pay.

But, in the event the car is damaged, I'd like to have the money to fix or replace it.

And finally, does that specific seller really have a qualified appraisal.... or just a piece of paper from a dealer saying it's worth $45,000? :roll:

Just my nickle. :D
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A car is only worth what someonelse is willing to pay

Post by collector »

I find prices on Lincolns to be out of reason to the market. I feel some Lincolns are worth way more than the market will handle and some are worth less than they are selling for. If a car is really special to a particular person they might be willing to pay any amount to get what they want. No disrespect intended but I find Lincoln owners as a rule do not usually have or want to spend a lot of money either on a new car or an older one. Now that is not to say there are some Lincoln owners that don't care what it costs, they just want it. If you buy a Lincoln to make money then your in the wrong business. As a general rule Lincolns have never fetched a big dollar. It makes me sad as I am Lincoln all the way. I like buying my Lincolns cheap and then I spend and spend until I get everything NOS and as perfect as I can. I might be in my cars way to deep but atleast people always make comments about their perfection. Case and point I have a 4k Mile 97 Mark LSC that I can win any show I put it in but its only worth at best 11k and that might even be high. Now isn't that ashame? It just isn't going to happen in my life time where Lincolns are considered really valuable. What makes me sick is when I was growing up if you owned a Cadillac or Lincoln you were "RICH" and if you owned a Mercedes or BMW you were strange and if you owned a Chevy you were the poor working class. Now it hurts me to say this but the dang "Chevies" as they are called by so many where I'm from in Southern California, are worth even more than a Cadillac. What is this, can anyone tell me???????????? It makes me sick to think luxury isn't worth as much as a pederstian vehicle.
Lugnut

Post by Lugnut »

What is this, can anyone tell me???????????? It makes me sick to think luxury isn't worth as much as a pederstian vehicle.


The vintage or collector car market is driven by emotion, not by logic. The "common" cars of the '50s and '60s are more popular today and bring more money than some of the luxury cars of the era because they were the family cars of the times or represent the car some wish they could have had in high school or college.

For those of us that grew up in the '50s it was a Chevy or Ford two door hardtop that was the apple of our eye. Those cars represent the dynamics of the times. The cruising of the main streets of America on Friday and Saturday nights. The were the cars driven to the drive-in hamburger joints (long be for McDonalds or Burger King) and the Drive-in theater's. '50s and '60s Chevy's and Fords in one form or another are the symbols of the culture that existed in perhaps the most dynamic, fun, and hopeful times experienced by any country on the face of this planet.
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Post by Barry Wolk »

I spend a lot of time at cruises and Concours shows. The average age of a "hot" car owner is about 60. The majority already have their luxury cars so buying an old one isn't high on their priority list, hence a low retail.

What I see is that the market is currently driven by people that have lots of retirement money and have decided to live a little. Recapturing their youth, even if only imaginary, is a huge factor in driving a car that was new and hot when one was young.

The person retiring today may have taken a big hit on their retirement portfolio but it's still worth, in many cases, many, many times more than was put into it. These are people that have everything they could have in life and driving a "classic" has taken the place of driving a BMW, Lexus or Jaguar as a the new status symbol.

I'm 53 years old. I am strongly considering buying a mid-'50s Bentley S-1 Continental drop-top (only 31 LHD made) with money from a prematurely cashed-in 401K fund. Yes I'll take a tax hit and a penalty hit to be able to enjoy my money now. I'd be willing to bet that the money lost to taxes will be made up in appreciation in about 2 years. I'm the kind of guy that's driving the market and their are millions of us baby-boomers out there.

I have three Lincolns because #1. I'm 6'5. #2. I'm 270 lbs and #3. My father never let me drive his. I guess I have Lincoln Envy.

Collector, your collection is very nice. I understand theme collecting but I believe you should select another kind of car if you have hopes of major appreciation. Your late '50s Cadillac is the kind of car people go into debt for, not the '70s and '80s Lincolns. Too bad Caddy didn't make a "Continental" model.

Speaking of Continentals, that might be a good investment over time. I'm surprised that Mark IIs don't go for $100,000 on a regular basis. There were only 2,550 made in 1956 and 444 in '57. I think that what hurts the Mark II price is that so many of them survived. I would bet that less than 10% were crushed. The rest are out there in barns and storage buildings.

That Caddy would sure look nice at my house.
'56 Mark II convertible, '51 Royal Spartanette, '56 Chris Craft Continental
'68 Lincoln Continental Limo, '77 Town Car, '55 356 Porsche Continental cabrio,
'69 Mark III convertible,'88 BMW 750iL, '88 BMW 325iX, '97 BMW Z-3, '98 ML-320

My newest car is 15 years old!
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Post by Michael C. »

Lugnut, that is a very astute observation and I agree with your post. For me it was the late '60's and early '70's Musclecars that I grew up with, but I've had my fun with them, building five Buick GS's and one '71 GSX (95 pointer by the way) and I'm ready to settle down into something that came my way when I was a little older.

Most of the early 80's Lincolns are still in at least fair condition with no major rust, parts are a heck of a lot cheaper than trying to find an original 1970 Buick hood tach, and I'm ready for a little elegance and a smoother ride rather than 500 pound feet of torque and 450 HP.

I like the leather. I like the quiet. I like the creature features.

I guess I really am getting older.
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Post by phantomcobra »

Back to the original topic... a proper appraisal will include examples of like vehicles in like condition with a value based on those examples. If your car is "appraised" at $100K (but it would only sell for $30K), you need a special policy, that costs more, to insure it. If you never "total" the car, you've been giving your money away.

Car insurance is rated on "market value". In other words, if one of my 1979s were to get wrecked, the insurance company would go out and find other 1979 Lincolns in similar condition and see what they are selling for (NOT WHAT THEY ARE FOR SALE FOR) and base my settlement on that amount. They would balance that with what the NADA used car guide (or some other guide) says and give me an offer for settlement. They should be able to back up those numbers with pictures and facts. For instance car A sold for $3,000 but needed new seat covers and car B sold for $5,000 and was excellent in and out so we offer you $4,500 for yours since yours isn't as bad as the $3K one and not as good as the $5,000 one.

Same goes for home appraisals. A home appraiser worth anything should be getting at least 4 or 5 examples of other homes in the area that are like the one being appraised and balance the condition of the homes for a "value".

If a person is saying their car appraised for $300K, one needs to ask them "based on what?". Not just that so-and-so said so and he owns his own appraisal business. The appraisal needs to be based on something or it is just a piece of paper with a number on it.
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