1. What is Fair Market Value (FMV)?

Fair Market Value (FMV) is the price a vehicle would sell for on the open market between a willing buyer and seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. It's commonly used for insurance, taxation, and sales purposes.

2. How Does the FMV Calculator Work?

The calculator uses the comparable sales method:

Where:

• \( ComparableSale_i \) — Price of comparable vehicle sale
• \( n \) — Number of comparable sales included

Explanation: The calculator averages prices of similar vehicles recently sold in your market area to estimate your vehicle's value.

3. Importance of FMV Calculation

Details: Accurate FMV helps with insurance coverage, tax assessments, sales pricing, divorce settlements, and estate valuations. It provides an objective measure of your vehicle's worth.

4. Using the Calculator

Tips: Enter prices of 2-4 comparable vehicles (same make/model/year, similar mileage/condition). More comparable sales yield more accurate results. Prices should be recent (within 3-6 months).

5. Frequently Asked Questions (FAQ)

Q1: What makes a good comparable sale?
A: Same make/model/year, within ±10% mileage, similar condition/features, same geographic region, and recent sale date.

Q2: Where can I find comparable sales data?
A: Sources include Kelley Blue Book, Edmunds, NADA Guides, Autotrader, Cars.com, and recent auction results.

Q3: How should I adjust for differences?
A: Adjust prices up/down for mileage differences (±$0.10-$0.25 per mile), optional equipment, and condition variations.

Q4: Does FMV differ from trade-in value?
A: Yes, trade-in values are typically 10-20% below FMV as dealers need profit margin for reconditioning and resale.

Q5: When is professional appraisal needed?
A: For classic/rare vehicles, legal disputes, or high-value transactions, a certified appraiser provides more accurate valuation.