When to call an appraiser

I spend my day job as an appraiser. For a long time, I felt the collector car market would be better off if more people had a basic understanding of what things were worth, which is why I began publishing a little guide in 2006. That book—today known as the Hagerty Price Guide—has helped democratize information about car values. The proliferation of online auctions, where experts often weigh in on values in real time, along with publications like the one you’re reading, have had the same effect. Today, even a casual observer can get a pretty good sense of what a particular vehicle is worth.

Appraisers, however, still play an important role whenever “pretty good” isn’t good enough.

Simply put, an appraiser’s job is to estimate the value of something—art, houses, businesses, jewelry, you name it. “Something” didn’t seriously include collector cars until the 1980s—around the same time headline-grabbing sales like that of casino magnate Bill Harrah’s car collection alerted people to the fact that old cars could be worth serious money.

In those burgeoning days of the collector car market, a trusted appraiser had a major leg up on the typical observer. Few people followed collector car values, and those who did generally focused on prewar metal, because that was where the big money was.

Today, appraisers like me get called in when variables throw off a standard valuation. Sometimes, the variables have to do with the car: A price guide can tell you how much to ask for your 1968 Ford Mustang. If it turns out that Mustang was driven by Steve McQueen, or has documented extremely low miles, or has unusual colors or options, you probably want to call an appraiser. Other times, these variables have to do with your life, particularly the sort that involve contracts and lawyers—divorces, estate planning, and sales of entire collections.

The actual appraisal process is straightforward and is typically approached in three ways. Most often, we take a market-example approach. In other words, we look for comparables and build values on those. A cost approach considers cars with fresh restorations or those built as restomods. And an income approach examines how much money a car makes for you.

An appraisal must be for a specific purpose and work toward a type of valuation. Think of it this way: The Bullitt Mustang, just like your car, has more than one value, depending on the circumstances driving the appraisal. There are, for instance, specific considerations behind the value of a charitable donation, or for a collection that is part of an estate. That said, the most common valuation used is “fair market value,” and with few exceptions, that is what most courts and government entities demand (think taxes and divorce).

No matter the specifics of an appraisal, it’s important to keep in mind that they are an opinion of value—nothing more and nothing less. That opinion should be researched and documented, with the valuation findings detailed in the appraisal package. An appraisal is not legally binding until a court, judge, or other legal entity such as binding arbitration says so.

Before you hire an appraiser, it’s important to appraise them. In most jurisdictions, there is little regulation guiding who can call themselves an appraiser—or, for that matter, a “certified appraiser.” Certified by whom? Do some research into accrediting organizations and compare credentials. There are large, multidisciplinary appraisal societies that have continuing educational requirements, as well as small, self-credentialing groups that have adopted some of the language of the big groups. There are also independents who do not belong to any credentialing or educational appraisal organizations.

Look at appraisal websites for credentialing information. Are they transparent about their services? Is their work done confidentially? Can you call their office and ask questions about their process, record-keeping, and costs? Are they well-known and respected in the hobby? Do they attend related events and keep current with the market and its continuing changes?

Keep in mind that the costs for an appraisal will rise if travel is involved. Not a big deal if the collection is 10 or more cars, but it could be a deal-breaker if the job is only one or two vehicles.

Having an appraisal done on your collector car(s) can offer peace of mind for any number of situations life throws at us. Just be sure to do your homework so that you know whom, and what, you’re getting before the work begins.

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Dave Kinney is a Hagerty Insider contributor, veteran market watcher, appraiser, and publisher of Hagerty Price Guide. Send him your questions at editor@hagerty.com.

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