As your probably aware not only does the value of your classic vehicle change based on the modifications and customizations you do (you are working on it, right?) but it also changes value as the market changes value. Let’s dive into that a little deeper.
If you’re not following the collector car market closely, you may not know that prices are changing quickly. In fact, the Hagerty Price Guide is now being published quarterly versus triannually so they can report on the state of the market in a more timely manner.
Of course, knowing the value of your vehicle is of utmost importance of you’re selling your vehicle. That’s obvious. Or is it? Certainly, if you’re selling the vehicle outright you need to know the value, with absolute certainty, so you don’t get killed in the negotiation. Or you could ask too much and not be able to sell the vehicle. But many cars are bought and sold via auction, like through Bring-a-Trailer.com. Why do you need to know the value of your vehicle if you’re selling it at auction? Well, if you’re going to set a reserve, it might be smart to know where to set it.
But I’m not selling my vehicle, I’m keeping it forever!
Well, what about if it’s wrecked (you do drive it, right?), stolen or falls in a sinkhole. Getting the appropriate amount from the insurance company can make all the difference in replacing the car, or not.
There are two ways you can insure your classic car, the first is the same way you insure your daily driver, which is stated value insurance. If the vehicle is totaled, the insurance company pays Actual Cash Value (ACV). ACV is, in theory, the amount it would take to replace your vehicle with an identical one. Insurance companies don’t have time to come look at every vehicle that is in an accident, so they rely on formulas to compute the value your vehicle. Very often those formulas are close to accurate. But, in many cases, especially with classic cars, heavily modified cars or trucks, those formulas aren’t even close. Knowing the value of your car or truck and proving it to the insurance company will save a lot of heartache and hassle if something does happen to your ride.
There is another way to insure your classic car, which you may have hear of, called Agreed Value insurance. That is, just like it sounds, an agreed value between you and the insurance company. If something happens to the vehicle, and it’s not repairable, they write a check for that amount.
As you can see, having your vehicle insured for the right amount is of significance if something were to happen to your dream ride. Getting a professional auto appraisal can be just the insurance you need to make sure your insurance is covering you adequately.