In re Nance, No. 12-10271, 2012 WL 2373406, at *2–*4 (Bankr. E.D. La. June 22, 2012) (Brown)

After BAPCPA, averaging N.A.D.A. “Clean Trade-In” and “Clean Retail” is presumptive value for cars with adjustments for high mileage and optional equipment. “[F]our basic approaches have emerged. Under the first, courts establish a presumptive retail value for the vehicle by deducting a certain percentage from the NADA Clean Retail value. Under the second, courts set the presumptive value of the vehicle at the full NADA Clean Retail value. Under the third, courts make use of NADA (or Kelley Blue Book (KBB)) values as starting points but hold that the facts of each case determine which value . . . . [U]nder the fourth approach, . . . courts average the NADA Clean Retail and Clean Trade-In values. . . . [B]ecause a Chapter 13 debtor’s vehicle is not reconditioned when she retains the vehicle, as it would be by a dealer prior to resale, the Clean Retail price should be discounted to reflect the fact that the typical vehicle is in a condition inferior to the “clean” condition assumed by the NADA Guide’s Clean Retail value. . . . The deduction from the Clean Retail price should be large enough to account not only for the hypothetical cost of the reconditioning that a dealer would perform but also for the total value that the reconditioning would add to the vehicle’s retail price. Subtracting only a high-mileage deduction from the full NADA Clean Retail value . . . is not an adequate adjustment. . . . [A]veraging the NADA Clean Retail and Clean Trade-In values is the most appropriate way to use the NADA Guide to fix the presumptive retail value of a vehicle for purposes of the second sentence of § 506(a)(2). . . . Because the court chooses to use the averaging method to reach a presumptive value, debtors and creditors will still be free to introduce evidence to show that the vehicle should be ascribed a higher or lower value. After the Clean Retail and Clean Trade-In values are averaged, the resulting value should then be adjusted according to the NADA Mileage Table . . . . [T]he value of any optional equipment included with the vehicle at the time of sale may be added onto the vehicle’s value.”

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