Would anyone be willing to share information on how you establish the value of a repossessed vehichle? Do you use NADA loan, retail or some combination or percentage thereof and are any other criteria factored in?

Any input would be appreciated.

Thanks

NADA loan value is a good place to start......it will give you an idea of what the vehicle might be worth at a commercially reasonable sale......but you also have to factor in any damage or other probable deductions to the value.

I used www.kbb.com. Kelly Blue Book gives you the opportunity to enter the condition of the vehicle and the mileage.

Can I ask why you would establish a value for a repo'd vehicle?

You need to establish a fair market value so you can record the repossessed asset and reduce the loan balance. I was thinking along the lines of starting with NADA loan and adjusting if there were any damage or mechanical defects.

Thank you all for your input.

We don't establish a value. We wait until the vehicle is sold and apply to the loan. We DO charge off the loan at 120 days. If the loan is charged-off when vehicle is sold, the funds are taken into recovery. Does that make sense?

Let me state that another way - in this day and age of dealer auto auctions or the selling of used vehicles, it is impossible to determine a value. There is more work in trying to get that value and adjusting your loan amount/charge-off amount than waiting for the vehicle to sell and using that amount. Our policy is to charge all consumer loans off in the month they become 120 past due. Proceeds from the sale of the vehicle (or any collateral) is applied to the loan when recieved. If before charge-off we apply the principal payment and charge-off the balance. If after charge-off it is taken into recovery.

We have a dealer give their opinion along with the NADA value, as almost ALL of ours are trashed before we get them back. Thank goodness we've only had a few in the 6 years I have been here. The problem with using KBB or NADA is they can't possibly account for the condition. One of ours NADA'd at $3500.00 and after we did the flea bomb in it we only got $500! Just because the seatbelts were made of yarn....

Any large capacity auto loan program works the value question along the lines of Okie. The auctions occur frequently so that the fair value is established within the same financial reporting period (on average).

We do indirect vehicle loans so I'm sure we probably do things different because of volume.