They base it on the book value. Average retail value is currently $4200 for a base 1983 Euro 240D sedan. When I checked with neighbor friend who is a loan officer at a local credit union he said they would loan up to $3000 for an average car. That was the thing that made me decide to finally go looking for a 240D. And it looks like I may have gotten a good solid one, for a reasonable price.
Gutefart I am humbled by your comment of my beater.
It does take a good picture, but the paint is a $1000 paint job done in '93 and is not the good German paint that matches exactly and it does have a couple of minor parking lot dings. The headliner and rear hat shelf is in need of replacement, two of the wood trim consol panels needs refinishing, and the carpet is showing it's age. On the plus side the car has no rust anywhere, a drive train in excellent shape, and everything in the car works except the CC and the two factory speakers in the rear shelf. The a/c will freeze you jewels off so it's nice enough to go traveling with, but no beauty on close inspection. It is however an excellent car for restoring, but I have not made up my mind as yet if I want to do the restore on the car.
As with just about everything else I own, if someone came along and offered me enough I would probably sell the car, then spend years regretting the decision. Just like I have regretted for a year now selling my ’00 VW NB TDI (diesel) and can’t believe I sold the most reliable, economical, and fun car to drive I’ve ever owned.