Motor Vehicles

Reminder: Current CalWORKs rules must NOT be used when determining federal eligibility for Foster Care.

CalWORKs Rules

When determining Foster Care eligibility for the child or for the federal eligibility, EWs search for income and property information in the CalWORKs case, if there is one. The CalWORKs rules for determining the value of motor vehicles are more liberal than Foster Care, i.e. a $4,650 exclusion. In the CalWORKs Program, most often only the vehicle’s “fair market value” (low Blue Book value) is considered. When determining the fair market value of a vehicle, encumbrances are NOT deducted. Therefore, the Foster Care EW must remember to ask “how much is owed”.

Determining Value of a Vehicle

The following rules apply when determining the value of a vehicle which is owned by a Foster Care child; or, when making a federal eligibility determination (linkage). Due to Welfare Reform legislation, Foster Care eligibility is based on the following AFDC rules as they existed on July 16, 1996.

Determine the net market value of each vehicle (market value minus encumbrances = net market value).

• Exempt up to $1500 of the net market value of one motor vehicle.
• Only one vehicle may be exempted.
• If the total net market value of the one motor vehicle exceeds the excluded amount, the amount over the appropriate limit is counted as a resource and included in the property limit.

Encumbrances

For a loan to qualify as an allowable encumbrance:

• The lender must be registered with the DMV as the legal owner of the motor vehicle.
• There must be a copy of the loan agreement on file which specifies the terms of the loan. It must state that the motor vehicle is collateral for the loan, specify the amount and duration of the loan, and state the frequency of repayment (i.e., weekly, monthly, etc.).

Using a credit card to purchase a vehicle or other property is NOT considered a legal encumbrance.

Methods to Determine Value

Generally, the “Current Registration” or “Vehicle License Fee Table” method is used to establish the value of motor vehicles. However, if the “Current Registration” or “Vehicle License Fee Table” produces an inaccurate value, ANY of the following methods can be used to determine a fair value:

• Three appraisals
• Low wholesale Blue Book value
• Recent bill of sale (car purchased within last 6 month)
• Current newspapers/advertisements
• Testimony/sworn statements from reputable individuals
• Appraisal by the County Property Specialist (as a last resort).

Current Registration

Multiply the current license fee times 50, subtract the encumbrances, and the result equals the net market value.

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DMV Table: [Refer to Medi-Cal Handbook, “Motor Vehicles, Boats, Campers, Trailers and Mobile Homes,” page 21-18]

Disagreement About Value

If there is disagreement about the established value, allow an opportunity to establish the true value of the vehicle.

Evidence of value may include:

• Estimates of repair
• Photographs of the vehicle (for example: to show damage)
• Sworn statements as to the condition of the vehicle, or
• Other evidence including advertisements.

Once repairs are made, redetermine the car’s current market value to ensure that property is within limits.

Trucks

Trucks are evaluated as commercial vehicles

• Weight fees are always included in the total fee paid at registration.  Do not include the weight fee when determining the value.
• The total fee minus the registration fee and the weight fee equals truck license fee.

Campers

• Campers which are one unit are evaluated as a vehicle using the license fee formula. They are NOT considered commercial vehicles and therefore have no weight fees.
• Campers which are two separate units, the truck and the camper unit, are evaluated separately. The truck is evaluated following the procedures above.

The camper unit cannot be evaluated as a motor vehicle but as other personal property.

Motorcycles

Use the DMV method to determine the value of a motorcycle. If this does not result in a “reasonable” value, any of the other methods may be used.

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