If you have been involved in an auto accident and your car has been badly damaged, you are likely about to enter into a protracted insurance process. Whether it is your insurance or that of another driver, someone is going to have to pay to cover the damages; whoever does that is going to want to have to pay as little as possible. Fair market value impacts how much your car is worth and could determine if your car is deemed a total loss or sent for repairs.
What is Fair Market Value?
Fair Market Value (FMV) is defined as “an agreed-upon price that is mutually acceptable to a buyer and a seller, where neither is under any pressure to complete the transaction.” In this case, the fair market value needs to be reached between the owner of the car and the insurance company. This is going to be important when it comes time to receive an estimate for the damage. For used vehicles, online tools like the Kelley Blue Book and Edmunds can help you determine the value of your car.
Getting an Appraisal
You are always entitled to seek out an independent appraisal after your insurance company has provided their own. You can spend some time shopping around and looking at multiple appraisals. This will take more time, but it may be worth it. You want to make sure you are getting the maximum value you can for your car. If your vehicle is deemed a total loss, you will likely only receive the FMV, which could place you in a whole. What if you still have car payments to make and now you need to buy a new car? Taking the time to have an independent shop value your car and look at the damage could save you money and hassle in the long run.