When a New Jersey divorce involves assets like a classic car collection, the value of these assets must be determined before a property settlement is reached. In the absence of a pre-nuptial agreement assigning ownership of the car(s) to one spouse, the collection can be considered marital property and added to the list of marital assets that must be divided.
The first step is to have a professional appraisal done. It is not unusual, especially in contentious splits, for both sides to obtain separate appraisals from a professional, especially if the collection is large and believed to be highly valuable. You have probably obtained an appraisal at one time in order to insure your car(s), but that is a replacement, not a resale, appraisal so you’ll have to get a new one for the purpose of valuing marital assets.
Although appraising classic cars is more an art than a science since the true value of a car is what someone will pay for it, classic car appraisers typically based their appraisals on three types of information:
- Recent public sales of similar vehicles (“comps”);
- Published values in The NADA (North American Dealers Association) Price Guide for the particular make and model; and
- The appraiser’s knowledge of the current market.
Appraisers will base their final value on Fair Market Value (FMV), which when applied to classic cars is defined as, “The price that the vehicle would sell for on the open market between a willing buyer and a willing seller, with neither party being required to act, and both parties having reasonable knowledge of the relevant facts.”
Appraisers will typically rule out comps from high-end auctions like Barrett-Jackson and low-end sellers on eBay, since these represent non-typical sales and cannot be considered fair market value sales. They will also consider things like provenance to determine value — a classic Cadillac that was owned by Elvis Presley would be valued much higher than the same car owned by a non-celebrity.
When you are faced with an important life decision regarding a key family relationship, the advice and assistance of an experienced family law attorney often proves crucial to your understanding of the issues involved and your satisfaction with the ultimate outcome of your family law matter. Contact us today for your free consultation.
