1. What is Fair Market Value?

Fair Market Value (FMV) is the price that 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 used by TRA for taxation purposes.

2. How Does the Calculator Work?

The calculator uses the average of comparable sales:

Where:

• Comparable Sales — Prices of similar vehicles sold recently
• Number of Comparables — Typically 2-4 similar vehicles

Explanation: The average of comparable sales provides a realistic estimate of what the vehicle would sell for in the current market.

3. Importance of FMV Calculation

Details: Accurate FMV calculation is crucial for determining the correct tax liability on used vehicle sales and preventing tax evasion through under-declaration of vehicle values.

4. Using the Calculator

Tips: Enter at least 2 comparable sales prices in your local currency. More comparables (3-4) will give a more accurate FMV. All values must be valid (greater than 0).

5. Frequently Asked Questions (FAQ)

Q1: What makes a good comparable sale?
A: Similar make/model, year, mileage, condition, and location. Sales should be recent (typically within last 3-6 months).

Q2: How many comparable sales should I use?
A: TRA typically requires at least 2 comparable sales, but 3-4 provides a more reliable FMV.

Q3: What if no exact comparables are available?
A: Adjust for differences (e.g., add/subtract value for higher/lower mileage) or use the closest available matches.

Q4: Does this apply to vehicle parts as well?
A: Yes, the same principle applies to used vehicle parts, though finding comparables may be more challenging.

Q5: How often should FMV be updated?
A: For tax purposes, FMV should reflect current market conditions and be updated regularly (at least annually).