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. In real estate context, it's used for property tax assessments, insurance, and sales.

2. How Does the Calculator Work?

The calculator uses the comparable sales approach:

Where:

• \( Comparable\ Sales \) — Prices of similar vehicles recently sold
• \( n \) — Number of comparable sales used

Explanation: The calculator averages prices of similar vehicles (same make, model, year, condition, mileage) to determine the fair market value.

3. Importance of FMV Calculation

Details: Accurate FMV is crucial for property tax assessments, insurance claims, divorce settlements, estate valuations, and sales negotiations.

4. Using the Calculator

Tips: Enter at least two comparable sales prices (three recommended). Use recent sales (within 3-6 months) of similar vehicles in your area for most accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What makes a good comparable sale?
A: Same make/model/year, similar mileage (+/- 10%), similar condition, same geographic area, and recent sale (within 3-6 months).

Q2: How many comparables should I use?
A: Minimum of 2-3, but more (5-6) increases accuracy. The calculator accepts up to 3 but you can run multiple calculations.

Q3: Should I adjust for differences?
A: Yes. If comparables aren't identical, adjust values (e.g., add $500 if your vehicle has 10,000 fewer miles than a comparable).

Q4: Where can I find comparable sales data?
A: Sources include Kelley Blue Book, Edmunds, NADA Guides, Autotrader, Cars.com, and recent auction results.

Q5: Does this work for classic/rare vehicles?
A: Limited. Rare vehicles may require specialist appraisal due to fewer comparables and subjective valuation factors.