How to Calculate the Fair Market Value of a Repossessed Car

Fair market values are often used to determine insurance replacement costs or vehicle tax values. Repossessed vehicles are sold at auction for wholesale value or sold privately for retail value. The Internal Revenue Service website states that lenders don't have to sell your vehicle for the best price, just as long as the car is sold in a “commercially reasonable manner,” meaning the lender can accept a lesser price depending on the market and condition of the vehicle. The vehicle's actual sales price may be below fair market value.


    • 1

      Access the websites of several appraisal guides, such as, the Kelley Blue Book website or the NADA Guides website (see Resources). Input your vehicle's year, make, model and level. Choose any extra features that increase your car's value if applicable, such as a sunroof or leather.

    • 2

      Input your vehicle's mileage, transmission and engine type for an accurate value. Review the car's trade-in and retail value from each appraisal website. According to the Lendingtee website, a vehicle's fair market value usually falls between the trade-in and retail value, so add the two values together and divide the result by two to obtain a median number.

    • 3

      Add the three averages from each site and divide the result by three to calculate the car's fair market value. Check classifieds in your area to determine if the local market affects the price of your vehicle. If the car is selling for less than you determined, recalculate your value accordingly.

    • 4

      Subtract any repair costs from your vehicle's fair market value, such as body and interior damage or excess wear and tear, such as bald tires or an inoperable engine. Your vehicle won't sell for fair market value if it's not in good condition.

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