Vehicle Valuation Techniques Flashcards

When adjusting a comparable sale that has a better feature than the subject vehicle, the appraiser should:

Answer: Subtract the feature's value from the comparable's price

Adjustments are always made to the comparable, so a superior comparable is adjusted downward to match the subject.

Which valuation approach is most appropriate for a one-of-a-kind custom-built hot rod with no market sales data?

Answer: Cost approach

Without comparable sales, the cost to build or reproduce minus depreciation is the most reliable indicator.

The process of weighing the value indications from different approaches to reach a final opinion of value is called:

Answer: Reconciliation

Reconciliation weighs each approach by reliability and relevance rather than simply averaging them.

A limousine used in a livery business would most likely be valued with significant weight given to which approach?

Answer: Income approach

Income-producing vehicles can be valued by capitalizing or discounting the net income they generate.

Selecting comparables both slightly superior and slightly inferior to the subject vehicle is a technique known as:

Answer: Bracketing

Bracketing places the subject's value between comparables above and below it, improving reliability.

Paired sales analysis is used primarily to:

Answer: Isolate the market value of a single feature or difference

Comparing two sales that differ in only one feature shows how much the market pays for that feature.

Which source primarily reflects wholesale dealer auction transaction prices?

Answer: Manheim Market Report (MMR)

MMR is based on actual dealer-to-dealer wholesale auction transactions.