Insurance buy-back FMVs

I did a bit of searching on the forum and found the general consensus is that an insurance total loss car cannot go into Challenge budget at the salvage buy-back amount because the sale is not open to other buyers at that price. I have a pair of cars that need Challenge budget values.

First, my '87 Thunderbird. Bought back from the insurance company for $300. Base V6/auto, 140K miles.
As I received the car: Torn bumper cover, cracked header panel, missing corner light and trim, jacked up fender and hood gap, bent tie-rod. Engine and trans leak profusely, cooling system over pressuring on hot days(possibly head-gaskets). Overall, solid body.

Also, I finally got paid out on JAM. The salvage value buy-back amount was $416
1997 GT, manual trans, 248K miles. As I received it: Yardsale Junk

What says the hive?

Looks like you could always turn right.

I say $425 each. 

I'd say $300 is fair for the Tbird, engine has some issues, body has issues, it's a base v6 car with a now salvage title. I don't see alot of value there.

JAM I'd say could be $500. The 4v, 5speed, 8.8, wheels, etc have some good value.

I'm constantly amazed at the deals GRM members are able to find on cars and parts, so some other members may say my $500 on JAM is a bit high.

In my experience the insurance buy back price to the rightful owner is not the best price.  I think the rightful owner is expected to pay more for the car (certainly not less) than what the open market is expected to bring.  

My '90 Infiniti Q45 was offered to the rightful owner for $2,800 by State Farm after hail damage.  He passed and I bought that car for just a $900 bid.  

My '01 Montero was offered to the rightful owner for just over $2k after front end damage.  I bought the car at IAA auction for $1,300.  

I think you are fine with using the FMV of what the insurance company sold the car back to you for.  The insurance company is not in the business of inside deals.  They are in the business of minimizing their loss.  This minimization then requires that they  get max value from the remaining asset.  If the insurance company thought the could get a higher max value from the open market then they would take the car to the open market.  In my two examples above the insurance company thought the open market would yield a high price.  The reality is that in neither case was that true.  

I paid $300 for a 38k mile light front hit mn12 t bird with a perfect running 3.8.

i don't have any issue with buyback price on either, i could cobble together a mark viii engine and t45 for that pretty easy.

John Welsh said:

I think you are fine with using the FMV of what the insurance company sold the car back to you for.  The insurance company is not in the business of inside deals.  They are in the business of minimizing their loss.  This minimization then requires that they  get max value from the remaining asset.

This is directly in line with my thoughts and experience as well. 
 

In reply to Patrick :

Especially considering this mkviii engine has over 200k claimed buy the PO, the T45 has the grinds when shifted above 5500rpm, and comparing it to the car Shibby is picking up:

surfshibby07 said:

.....we have not finished negotiating price yet but i can tell you currently we are at 500 for everything.....

 

 

In reply to gumby :

It also plays well into the presentation story...

John Welsh said:

In my experience the insurance buy back price to the rightful owner is not the best price. 

I’ve had different experiences. 

Recently bought back my F250 with a 7.3L diesel from the insurance company for $950. It was worth $5K on the open market. 

You are right they are in the business of minimizing their losses. However, they make money selling parts cars, and they DO have a value. 

The insurance company is in the business of converting their recovered loss asset into cash as quickly as possible. If there is real value in it, they will turn it over to the rebuilder auctions (or offer it to the owner at a high price). If it is an oddball vehicle, they’d just as soon convert it quickly by selling it to the owner. 

It doesn’t have much to do with the actual street value of the vehicle. It has to do with how many were manufactured of each model, and how fast they can convert it back to cash. 

An engine from a popular vehicle (or one that blows engines frequently) is more valuable than an oddball like a 3.3L SVX motor (regardless of the street value of the vehicle)