1. What is Fair Market Value (FMV)?

Fair Market Value (FMV) is the price that a property 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. For vehicles and equipment, FMV is typically determined by analyzing comparable sales.

2. How Does the FMV Calculator Work?

The calculator uses the comparable sales method:

Where:

• \( Sale_1, Sale_2, Sale_3 \) — Prices of comparable vehicle/equipment sales

Explanation: The calculator averages three comparable sales prices to estimate the fair market value of your vehicle or equipment.

3. Importance of FMV Calculation

Details: Accurate FMV determination is crucial for insurance purposes, tax assessments, financing, sales negotiations, and financial reporting.

4. Using the Calculator

Tips: Enter prices from three recent sales of similar vehicles/equipment in the same condition and market. All values must be valid (greater than $0).

5. Frequently Asked Questions (FAQ)

Q1: What makes a good comparable sale?
A: Comparable sales should be for similar make/model/year, similar condition, and within the same geographic market (adjusted if necessary).

Q2: How recent should comparable sales be?
A: Ideally within the last 3-6 months, as market conditions can change rapidly.

Q3: Should I adjust for mileage differences?
A: Yes, significant mileage differences (more than 10-15%) should be adjusted using standard mileage adjustment rates.

Q4: What if I can't find three good comparables?
A: The calculator requires three values, but in practice, you might need to expand your search geographically or temporally to find good matches.

Q5: How does condition affect FMV?
A: Significant condition differences should be accounted for with adjustments (typically 5-20% depending on condition variance).