Project Car Value

[kdml]

I've looked at some of the previous threads discussing values, but I have a somewhat unique question.

 

I originally purchased my 65 Riviera in 2009, for $3,500, as a non-running project needing a complete restoration.    I did not register it as I was not going to pay annual registration fees for something which was going to take me years to finish.  Now that I completed the restoration, my state required me to pay taxes based on the greater of the purchase price or NADA value of the car (low NADA value is 10,300).  I argued with them that I paid much less for the car and not even today would anyone pay $10,300 for a car in the condition it was in when I bought it in 2009 (essentially the NADA value is too high).  I feel like I am getting taxed twice, as I had to pay taxes on the parts I purchased to bring the car to the value they are assigning to the car now.

 

The DMV told me I could file a case requesting return of some of the taxes paid.  To do this I need some better evidence of value.    

 

I am looking for some evidence of actual project car sales or better publications for identifying value.  The only online sources I can find online are NADA, which only provide low retail, which is clearly not a project car.  I used Hagerty's valuation tool, but their fair value (#4) is 9,800 for a daily driver.  My car was not even close to a daily driver when I bought it.  I thought I had an older copy of the Old Car Pricing Guide, but I cannot seem to find it.   

 

Does anyone have any information I can use for my case?  I will take anything current; although, if anyone has something from 2009 (when I bought the car) kicking around, that would be great too.

 

Thanks

Doug

[KongaMan]

It's not in the condition it was in in 2009; taxes are calculated on the current value rather than former value.  If you'd registered in in 2009, you'd have an argument that it should have been valued at $3900 then.  It's like a house: build an addition or add a garage, the value and your taxes go up.  Moreover, you don't get a credit for the sales tax you paid on the lumber.

 

If they value the car at $10,300, you might be advised to take it and run.  NADA values on a base 65 Riviera go from $10,350 to $46,600.  A freshly restored car is probably closer to the high end than the low end.  If you push too hard, they might want to look at the car.  If they do, there's a chance they tell you it's worth $30,000 and tax accordingly.

 

BTW, how much are you going to insure it for?  That's a good benchmark of what you think it's worth.

[Turbinator]

First things first. I’d consult your state’s DMV RULES. The clerk at your DMV way very well not have had experience with your particular case. Beaucrats have been known to make mistakes. Once you know the rules you may have more information than the clerk.
I would take your original receipt and visit your DMV again. Maybe go to another branch. In Maryland registering the vehicle is a fee not a tax ( although it is a tax). My first thought is how can you pay a registration fee based on more than what you paid for the car? Information is power. Dig into those  DMV regs and find the truth.

 

IF you’ve misplaced the Original receipt find the guy you bought it from and get another back dated receipt. Maybe the title transfer has the cost of the vehicle on the document. Good luck. I’d love to know you come out on top.

 

Turbinator

[kdml]

I understand the condition is not the same as it was in 2009; however, this is a sales tax and the car was sold for a lower amount.  I understand why they are requiring a comparison to NADA as they don't want people to complete a bill of sale for lower then what they paid to reduce the tax owed. 

 

I don't agree with the comparison to property taxes.  Property taxes are an ongoing tax you pay annually, as compared to a one time purchase tax.  When I bought my house I had to pay a one time sales tax at the time I closed on the house and continue to pay property taxes each year, based on the value of the house. 

[kdml]

Thanks Turbinator.

 

I spoke to two people at the DMV prior to registering the car.  The rules are pretty clear:

 

"Tax is due at the time of registration and/or title at a percentage of the purchase price or the National Automobile Dealers Association (NADA) clean trade-in value, whichever is greater, minus value of trade-in vehicle or any other allowable credit."

 

The problem is that the rules were not designed for my situation and I would like to call them out on it; regardless of whether I win or not.  I am just looking for some evidence of values to make my argument.

[KongaMan]

Based on your quote, it sounds like you're in Vermont.  You might look into an exempt title.

 

Or just pay it.  Summer's half over already. If you get into a protracted dispute, you might not be driving it until next year.

[kdml]

Agreed

I’ve already paid the tax based on the NADA value for that very reason. After almost 11 years I was not going to allow a few hundred dollars stand between me and driving the car. 

[KongaMan]

At some point, that's the wise (if annoying choice).

 

Example: Last year I was renewing the registration on one of my cars.  The registration page is supposed to list every car you own.  I noticed that one (my Riviera) was missing.  I entered the VIN and hit search.  Nothing.  I entered the registration number.  Nothing.  So I grabbed the title and registration and went to the DMV.  They said, "That car doesn't exist."  So I laid out the title and registration, and told the clerk to look out the window for an unobstructed view of the non-existent car.  She agreed that it looked like a car, and it matched the description in the documents.  She called her boss, and she came to the same conclusion.  They huddled together, and the operating theory was that because I had put Historical Vehicle plates on the car in 1989, and it had been more than 25 years since the record had been updated, it was purged from the system.  I had two choices: engage in a protracted escalation with no guarantee of satisfaction all the while (not) driving an illegal car, or pay $28 and walk out with new, valid title and plates in 5 minutes (they did actually cop me the plates, but they couldn't waive the title fee).  It wasn't a hard decision -- although I was put out that I had to give up my original, typed title from 1979.  Moral: Sometimes you just take it in the shorts for the greater good.

[bodayguy]

How did you get the title without paying taxes in 2009?

[KongaMan]

If you read the regulation, it says "Tax is due at the time of registration and/or title..."  That seems to imply that they're not particularly anal about when you pay it.  That's maybe not out of character in Vermont, as they have some fairly lax title requirements.  In fact, they're the home of the "Vermont loophole", wherein they will (would?) give you a title to a car even if neither the car nor the owner is in Vermont.  Do a song and dance (show a Bill of Sale, get the VIN confirmed, etc.) and Bingo! here's your title.  That's especially useful for buying a non-titled car elsewhere, getting a title in Vermont, then transferring it to your home state as a free and clear title.

[kdml]

Yes, I’m in VT and VT does not require titles on cars over a certain age.  I only required a bill of sale to register the car. 

[kdml]

Back to the topic at hand.  Anyone have any better indicators of value for project cars?  I will take something current or something older.

Thanks

Doug

[KongaMan]

Legwork.  Start hunting up and documenting similar listings and/or sales on craigslist, eBay, Hemmings, etc.  

 

Then ask yourself how much your time is worth, and whether it might more productively and enjoyably be spent driving and/or improving your car.

[Belle Riv Devo]

On 7/14/2020 at 7:26 PM, kdml said:

Back to the topic at hand.  Anyone have any better indicators of value for project cars?  I will take something current or something older.

Thanks

Doug

Hey Doug:

 

As a former assessor of real and personal property - you are fighting an uphill battle. The juice is not worth the squeeze, as we say. Your assessor/ tax collector only knows how to follow convention, and since your car is probably one of several thousand in the community they hate to set a deviating precedent for you.

That said, you are right- and this is purely an argument about value. The standard they use to approximate ad valorem assessment (which is the statutory requirement) is NADA but that doesn't mean that it is accurate. Outside of taking it to your appeals court which will cost you way more than you will save, you could get a licensed appraiser to issue an opinion of value or swamp them with data on parts cars that are for sale currently.  There are a few parts cars out there which are for sale for $1,500 -$2,500 and if you had some pictures of your car at the time of purchase you could draw the analogy. Lastly, yesterday I agreed to buy a 65 not running or rolling but in very good condition for $5K. You could use that to argue prices are higher than 10 years ago when you bought your car so the $3,500 is more accurate than $10K. 

If I can help you give me a shout.

Brad

[Rivman]

On 7/12/2020 at 5:45 PM, kdml said:

 

The DMV told me I could file a case requesting return of some of the taxes paid.  To do this I need some better evidence of value.    

 

I am looking for some evidence of actual project car sales or better publications for identifying value.  The only online sources I can find online are NADA, which only provide low retail, which is clearly not a project car.  I used Hagerty's valuation tool, but their fair value (#4) is 9,800 for a daily driver.  My car was not even close to a daily driver when I bought it.  I thought I had an older copy of the Old Car Pricing Guide, but I cannot seem to find it.   

 

Does anyone have any information I can use for my case?  I will take anything current; although, if anyone has something from 2009 (when I bought the car) kicking around, that would be great too.

 

Thanks

Doug

 

Doug,

 

I know this post is a few weeks old, but I was going through some “stuff” in my garage and ran across this. I found a copy of Old Car Price Guide from Oct 2005. Even though it is not from 2009, it is a closer value than anything that is out right now.

 

  

 

I’m not sure if it will help you with your value dispute, but I pictured the cover, the condition code descriptions, and the page with the 1965 Riviera. Click on the image and it should give you a printable/legible image.

[XframeFX]

Aside from Doug's registration concerns, I find the 2005 Price Guide interesting in the trend to 2020 values.

I can't help but notice the 2005 Price Guide having the '63 & 64 Rivs higher in value than even the '65 Gran Sport!. Also note, the value of a '65 Gran Sport is not much higher than a none Gran Sport of that year.

So today, as an investment, the 1965 Riviera Gran Sport is it.

 

John B.