Realistic Value vs. Market Value for tools

[kustom53]

Here's the deal...I'm not trying to sell anything in this section as I know where to do that at. A little over 2 weeks ago, my Dad, my best friend and partner in crime finally lost his fight and passed away. He had an Automotive Repair Shop that I literally grew up in...(and am still keeping it running) for 42 years. My Dad turned 60 so he was young. But anyways, he, like all of us have adult ADHD when it comes to shiny tools that we don't have the money or room for in our tool boxes. Along with the business, I inherited 40 years of tools. He would always say, " I don't get why you buy all this ****, all my tools are mine when I die!" As you all can understand, no one wants to think about that.

So here is my dilemma, since taking ownership, I am going to do an inventory on EVERY tool in that place for insurance purposes. What do you guys think "fair" and "realistic" values would be from the new truck price as all of these tools are Snap-On, Mac, and Matco. I know the truck prices are ridiculous, but for example, and Snap-On 80 tooth flex head is about $110-125 off of the truck depending on the person driving it, but what is a good amount to insure it for, and honestly, if I decide to sell, what could I expect? I know we all look for deals here, but let's me honest, some of this stuff simply costs what it does and there is no way to get around it.

What do you guys think is a practical, feasible approach to me going at this? Any thoughts are appreciated...and don't worry, I'll be posting some things on the Classified Section in the next few weeks as I go through the boxes...to give you an idea, he had 17 different metric wrench sets...yep, that's my Dad!


Thanks,

Marc

 

[BFHtime]

I would insure for the cost the to replace the tool.

 

[gtg082y]

To me, insurance value is simply replacement value. If it disappears or is destroyed, what would it cost to replace? I would say insure it all at new MSRP.

 

[kustom53]

that's what I was figuring...thanks guys.


Now, in the case I sell the shop in a few years...how should I go about pricing the tools that way if said buyer was interested in buying it as a turn-key business?

 

[BobsurUncle]

You need to insure the tool at replacement cost. If you have a loss and need to put a claim in, the insurance is going to depreciate off the replacement cost. And trust me, their depreciation factors are BS.

As far as pricing the tools in a business sell off. The equipment is factored into the appraised value of the business. Years in business, total yearly sales, accounts. If the business appraises at 100k, then that's what its worth, equipment included. Doesn't matter that you have 500K in tooling.

 

[Brownsfan]

Make sure there is no depreciated value clause in the policy. I know people who did not get replacement value but the depreciated value when a shop was broken into and robbed of a good amount of stuff.

 

[jakemac]

For selling, start at 1/2 MSRP and then adjust down for condition. Be ready to go less on bulk buys.

 

[kustom53]

thanks guys! I never knew there could be a "depreciation clause" but it does make sense!! I will definitely look into that when I do the insurance paperwork.

 

[Rico.]

Now, in the case I sell the shop in a few years...how should I go about pricing the tools that way if said buyer was interested in buying it as a turn-key business?

Sorry to hear about your loss...

This is kind of the same deal as insurance.... You tell the potential new buyer that all the tools
included in the sale are worth $**,*** to buy new and leave it up to the buyer to start
negotiations on a discount.

 

[nicksnothereman]

I would insure for the cost the to replace the tool.

Yes. Used replacement same (working or busted) condition.

I don't know about using a deceased man's tools though. That's a personal judgment deal.

 

[Mohawk Dave]

ACV= Actual Cost Value (What is item worth now in current depreciated condition)
RCV=Replacement Cost Value (A Brand New item equivalent to said item)

Make sure your policy is for RCV.

 

[kustom53]

thanks guys...there's a lot of his stuff I will keep no matter what happens, but in the case I decide to sell the business in the next 5 years or so there is no reason for me to keep most of the stuff. Again, I appreciate all the advice.

 

[BFHtime]

As far as selling the business I would use a business broker. They will know the right questions to ask. Property value, building value, goodwill, gross and net numbers, etc. It can be quite complicated when done thoroughly. Competition and demographics are factors too. Usually the numbers for the past three years, will be what is needed to show a trend of how the business is doing. Good luck.

 

[Craptain]

Yes. Used replacement same (working or busted) condition.

I don't know about using a deceased man's tools though. That's a personal judgment deal.

These are not just any deceased man's tools they are his fathers tools. I would be proud to use them.

 

[alwaysFlOoReD]

I have no problem using tools that belonged to someone that is passed on. I like to think it keeps me in contact with the spirit, even if I didn't know the person. I recently picked up a bunch of stuff that was going to go into the dumpster as the son had absolutely no interest. I didn't know the guy but it was really interesting seeing the tools that he had fixed or repurposed or outright made from scratch. Every time I use a tool that he owned, I think of that person...what else would you want as a legacy?

Richard

 

[ttpete]

I have no problem using tools that belonged to someone that is passed on. I like to think it keeps me in contact with the spirit, even if I didn't know the person. I recently picked up a bunch of stuff that was going to go into the dumpster as the son had absolutely no interest. I didn't know the guy but it was really interesting seeing the tools that he had fixed or repurposed or outright made from scratch. Every time I use a tool that he owned, I think of that person...what else would you want as a legacy?

Richard

I agree. I've been able to find many things that toolmakers have made, parallels, angle plates, V-blocks and 1-2-3 blocks. I have a lovely set of four of the latter, and they are drilled and tapped, and there is a wooden box to keep them in. I checked them on the granite plate, and they are all matched spot on.

A friend had a used tool store, and he bought estates and gave me first pick on whatever came in. It's surprising how many brand new quality mill cutters came in, and I got what I wanted at very good prices.

I was able to acquire very nice older American made precision tools, Starrett, B&S, and Lufkin, and a set of oak Gerstner boxes that were almost new. I'd rather have good used American and European precision tools because they were the best before the far east got into the business.

 

[justanengineer]

Yes. Used replacement same (working or busted) condition.

I don't know about using a deceased man's tools though. That's a personal judgment deal.

I personally hate all of the "man card" bs that goes on around here, but in this instance Im sorely tempted to tell you to turn yours in. All of my "old" tools came from one deceased man or another, usually multiple, and I'd put a higher price on them than any of the new **** made today simply bc theyre much better made, not to mention "collectible" or "rare."

I agree. I've been able to find many things that toolmakers have made, parallels, angle plates, V-blocks and 1-2-3 blocks. I have a lovely set of four of the latter, and they are drilled and tapped, and there is a wooden box to keep them in. I checked them on the granite plate, and they are all matched spot on.

+1. My father who was not a toolmaker but a metallurgist turned shop teacher passed on some similar tooling that his teaching mentor, a former toolmaker, gave to him when the guy retired. None of it is simply ground as many parallels/blocks are, every precision surface is beautifully hand scraped and flaked. They make Starretts look like a joke as far as accuracy is concerned.

 

[Gregg33]

I have no problem using tools that belonged to someone that is passed on. I like to think it keeps me in contact with the spirit, even if I didn't know the person. I recently picked up a bunch of stuff that was going to go into the dumpster as the son had absolutely no interest. I didn't know the guy but it was really interesting seeing the tools that he had fixed or repurposed or outright made from scratch. Every time I use a tool that he owned, I think of that person...what else would you want as a legacy?

Richard

That is so true, sounds a lot like a lot if tools I bought a few years back.