Equity in Automobile

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  • #13837
    Starla Smith
    Participant

    I am working with a client who has a 10 year old vehicle. She is single and this is her only vehicle. The vehicle is paid for, so the quick sale value will be in excess of the $3,450 exclusion.

    My questions:

    What is best practice for determining market value? Would you get quotes from used car lots for what they would pay you for the vehicle, or use NADA values? If using NADA values, which value would you use? Trade in value, private party value?

    To get the equity in the vehicle excluded from the OIC, could I have her apply for equity loans to see if she can get 3 rejection letters? I don’t believe she would be able to get a loan due to her credit history and an IRS lien.

    #13899
    Morris Armstrong
    Participant

    I think that you would use the dealer value since that is the one that would be the quickest sales. Private sales take time! There are websites that you can try to get a car value and they do take into account excess mileage and poor condition of car.

    #13916
    Eric Green
    Keymaster

    I agree. I would go to Kelly Blue Book and get the Trade-In or Dealer Value and use whatever works in your client’s best interest

    #14005
    Charles Zagara
    Participant

    I always use the trade in value and print the report and attach it to the OIC package. This way the offer examiner doesn’t have to do any digging where they may come up with a higher number. Never had my value questioned.

    #14074
    Starla Smith
    Participant

    As follow-up to my question and based on your responses, since there is no lien on the vehicle the quick-sale value will be more than the $3,450 exclusion. This is her only vehicle and it is 10 years old. I would like to get the couple of thousand dollars of equity in the auto excluded for an OIC as she would have no way to get to work if she sells the auto. Does she need loan rejections in order to get this equity excluded, or are there other arguments I can use?

    #14075
    Starla Smith
    Participant

    As follow-up to my question and based on your responses, since there is no loan on the vehicle the quick-sale value will be more than the $3,450 exclusion. This is her only vehicle and it is 10 years old. I would like to get the couple of thousand dollars of equity in the auto excluded for an OIC as she would have no way to get to work if she sells the auto. Does she need loan rejections in order to get this equity excluded, or are there other arguments I can use?

    #14076
    Starla Smith
    Participant

    Excuse the duplicate post… I don’t see a way to delete it.

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