CAA Vehicle Valuation Techniques 2

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

Cost approach

Answer

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

Question 3

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

Accepted Answer

Reconciliation

Answer

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

Question 4

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

Accepted Answer

Income approach

Answer

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

Question 5

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

Accepted Answer

Bracketing

Answer

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

CAA - Certified Automotive Appraiser Practice Test