Insurance, legal issues and peace-of-mind are the leading reasons for needing an appraisal. A thoroughly documented appraisal is a valuable asset for any collector. Books have been written on types and methods of appraisals, but how can you tell if the appraisal you get has the information you really need?
Getting a worthy appraisal starts with picking the right appraiser. According to David H. Kinney, an Accredited Senior Appraiser with the American Society of Appraisers (ASA), “Appraiser qualification, experience, and knowledge beyond the particular make or brand of car is of utmost importance.” Looking for an appraiser with a professional designation is one way to assure quality. There are professional designations for personal property appraisal but few with an emphasis on collector car appraisals. Those designations conferred by the ASA, the International Society of Appraisers ( ISA ) or an institute of higher learning, such as the few colleges and universities that offer degrees in appraisal, carry the most weight. But university-trained appraisers and the extremely high standards of the ASA make those accredited appraisers for cars a rare commodity.
The likelihood of finding an accredited appraiser conveniently located to you is slim. In the absence of real credentials, ask your appraiser how many appraisals they do per year and how many they’ve done over the years. Ask to see a sample report and a résumé of his/her background on the subject. Make sure your appraiser knows the procedures and processes of appraisal and can demonstrate an ability to explain their methods. Remember, the appraiser may have no choice but to back-up his/her report in court, and you don’t want to be caught using one who can’t or won’t professionally explain his/her actions when the report is being questioned.
Also make sure to ask for features they offer. Is the appraisal updateable? Does the appraiser compare market value with receipts? Does the appraisal reflect a geographic value, i.e., ragtop exotics in Southern California ?
If you’re being given a one-page report with little more than a fellow collector telling you that he believes your car is worth “X,” this is not an appraisal. You need to be aware of the difference between one person’s opinion (regardless of qualifications) and his/her ability to access data from other appraisers. As well, an appraisal from your mechanic or the restorer/builder is useless.
The ASA has 26 points that it requires all members to include in reports. According to Steve Metz, an appraisal professional who performs car, art and real estate appraisals, these 26 points are dictated by law and are similar to the standards of real estate appraisals. There is no single standard form for collector car appraisals, but they all should conform to the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP are the generally accepted standards for professional appraisal practice in North America as established by the Appraisal Standards Board. The Appraisal Standards Board is a division of the Appraisal Foundation, the organization empowered by Congress to set standards by law for all appraisals in the United States . USPAP standards were created to deal with the abuses of real estate appraisals in the banking crisis of the late 1980s and subsequently extended to all appraisal fields. To learn more about USPAP and make sure your report conforms to its standards, visit www.appraisalfoundation.org.
Not all appraisers are going to do the job the same way, although in theory, they should all come to roughly the same conclusion. Some of the key items (part of the 26-point list) that I believe should be included in all proper appraisals are:
- Clear identification of the car being appraised including VIN, mileage and correct model designation
- Who the report was prepared for
- Who ordered the report
- What the report is to be used for
- Date the car was inspected
- Date the report was completed and signed
- Name and résumé of the appraiser
- Clear and detailed description of the car, including options present vs. those available, actual build sheet and protecto plate present vs. researched, proof of numbers matching, build date/location, number of model produced, percentage of production, ways this car differs from a better model, specific notes on classic problem areas with vehicle.
- Documentation of the valuation sources such as price guides
- Comparable sales from auction results or private sales
- Explanation of the valuation these sources indicate and how they equate to the subject car
- Methodology used to arrive at the final value for the car
- Photos of the car or copies of documents used to prepare the report
- Most importantly, the report should arrive at a specific value for the subject car and not a range.
Professionally prepared appraisals will always be to your benefit. Making sure your appraisal conforms to the guidelines I’ve outlined above will help provide some peace-of-mind for you and others in the hobby.
For a list of appraisers, please visit the Hagerty Resource Directory and go to “Appraisers.”