During the divorce, the parties will have to come to an agreement on a value of their personal vehicle. Thankfully, there are tools available that are appropriate for estimating the value of a car.
Disputes over Automobiles
In a way, disputes over automobiles are almost inevitable, especially when only one is owned by the divorcing couple, or if a given vehicle holds personal value. As personal vehicles play an important role in the family’s everyday life, the spouses and their divorce attorneys will have to determine the value of the car and properly assign them.
Accurate Valuation of Automobiles
There should be little trouble in correctly valuating the automobiles in question, due to the sizable automobile market and the limited amount of variable that affect their values. There is a huge data base available that your attorney will be able to use to determine the value of the car.
The Structure of Valuing an Automobile
While the method of valuing a car is comparatively easier than, say, valuing a house, the process can still follow a structure. Both spouses can simply reach a consensus on the value of the automobiles to be used in the marital estate. This joint determination, though, may not reflect the true value of the automobiles.
An attorney will likely advise the two parties to rely on valuation services like the National Automobile Dealers Association (N.A.D.A) Guide or Kelly Blue book, which can be found online and user friendly. Since both spouses can derive values from at least two services, they are able to:
Be directly involved in the valuation steps.
Obtain the same or similar value on the car, should they enter the same information.
Once they obtained the values, the parties can either average them or decide on a value to be used in the summary process.
Determining the Condition of the Car
The spouses assessing the value of the car will frequently question the condition of the car. If the car has considerable physical damage or mechanical defects, then the value derived from the valuation guides will not be adjusted accordingly. The couple's divorce attorney will inform them that only a body repair shop or a mechanic can ascertain the value of such cars by estimating the cost of repairing the vehicle to a fair or at least reasonable condition.
Determining the Type of Lease
It is important to understand whether the vehicle has a traditional lease or whether it has a lease purchase option with it. With a traditional lease, the vehicle is turned back in to the lessor when the lease expires. The lessee retains nothing. Only a monthly debt goes along with the vehicle.
In a lease purchase arrangement, the lessee intends to keep the vehicle at the end of the lease. The title actually transfers to the lessee, normally after a final buyout amount. In situations where only a small buyout remains at the end of the lease (such as a few dollars), the likely intent was for the lessee to acquire title to the car, thus a traditional lease.
However, if say $5,000 is left at the end of the lease, it is usually presumed that it was not the lessee’s intent to keep the car – thus, it is a lease purchase. Consult an attorney if you are unclear which type of lease you have.
In the lease purchase situation, the automobile will be an asset and its value gets added to the marital assets. However, the remaining payments and any final buyout amounts get added to the marital debts. If the vehicle was purchased during marriage and it is a traditional lease, then the vehicle will be considered a debt of the marriage. You should discuss your case with an experienced lawyer if the car was leased prior to marriage but continued into the marriage and the divorce, since this situation is more complicated.