How to Calculate Actual Cash Value of Your Car

If you’re looking to learn how you can calculate the actual cash value of your vehicle (ACV), then you’ve come to the right place.

Perhaps you were in a total loss accident, or you’re just curious to know what your car is worth in cash. In either case you’ll need to know how much your car is worth.

Value is a subjective thing, and there are a lot of myths out there as to how you determine it for your vehicle. In the following article, we’ll lay out this process carefully and dispel any misconceptions you might have. Specifically we’ll talk about…

What is Actual Cash Value?
How is Actual Cash Value of Your Car Determined? 
Can You Dispute an ACV assessment?

Let’s get started….

What is the Actual Cash Value of My Car?

The phrase actual cash value can be in reference to someone’s car trade in or property value. Actual cash value is most commonly used to refer to the value of a damaged vehicle, to determine if it will be totaled out or repaired.

You may have heard that a new car loses an automatic percentage of its value the second it’s driven off the lot.

From Ameriprise Insurance’s website:

“Actual cash value is another way of saying your vehicle’s market value.” [1]

For example, Driver A pays $10,000 for his car and drives it home. He then (hypothetically) decides to sell it to his neighbor one hour later. The neighbor offers $9,000. The inherent value of the car has not changed in one hour, but it’s ACV has.

To further understand ACV the best thing to do is learn about how its value is determined.

How is Actual Cash Value Determined?

Anyone who tells you there is one predefined way of reaching an ACV figure is misleading you. Approaches vary by state, auto body shop, and insurance carrier.

The main factors considered are:

  • Accident history
  • Current Age of Vehicle
  • Expected life span of vehicle
  • Maintenance History (was it well taken care of?)
  • History of the specific model (for example: were there any recalls?)
  • Mileage
  • Replacement cost/purchase price of the vehicle

Here are some common methods of determining actual cash value:

Fair Market Value:

This method of valuation is arrived at by surveying the market and concluding on some average. This can be done through quote shopping, checking wholesale prices or reviewing comparable vehicles. Insurance companies are often aggressive with pushing low fair market values, so be aware of that.

Replacement cost:

Sometimes it’s not possible to use outside factors to reach a fair market value for a vehicle. In this case, insurance adjusters will turn to figuring out the replacement cost — which is exactly what it sounds like, the cost of replacing the vehicle. Replacement cost is based on the replacement price of a new vehicle, minus a set amount of depreciation to be deducted from the total.

Book Value:

There is also what is referred to as “book value”. The Kelley Blue Book is the most common source used to reference the ACV of a vehicle. The Blue Book will come up with a value based on ‘year, make, model, mileage, options, condition and location of your vehicle and then provides four different values for the vehicle: retail, trade-in, private party and certified pre-owned.’[2] Although Blue Book is the most famous, Nada and the Black Book are also used.

Most insurance adjusters will use some variation of the methods described herein for reaching the ACV of your vehicle. Many of them will use computer systems to aid this process.

Can You Dispute an ACV assessment?

Of course, you can. Some unscrupulous insurance companies may try to lowball you on the ACV of your car. Bigger carriers may be more honest but are also incentivized to offer you less.

If you feel that the price assessed to your vehicle is unfair, there are a number of things you can do.

  • You can ask for a copy of the vehicle valuation report
  • You can get an independent appraisal done
  • You can provide receipts or other documentation of vehicle upgrades
  • You can point out any mistakes or logical flaws in the insurance company’s figures

According to the guidelines of good faith claim handling, an insurance adjuster must listen to you if you raise valid points. If they don’t, you can file a complaint with your state’s insurance commission or better business bureau.

Some states even have added protections for consumers and consumer-friendly interpretations of insurance terms — so if you want to know the specific details check your state laws regarding ACV calculations and determinations.

What About Classic Cars?

With older vehicles, it is not possible always possible to get actual cash value for a totaled car. In this case you would need to have a “stated value” or “agreed value” policy — basically you decide ahead of time how much you should receive if the car is totaled.


Totaling a vehicle is never a fun experience, and being confused about its value when you’re trying to get it replaced compounds the problem. As mentioned at the top, there is a bit of subjectivity in play when it comes to ACV calculations.

But in order to be prepared (and keep your insurance company honest) you need to know the basics:

    • The actual cash value of a vehicle is the amount of money it’s worth on the open market.
    • ACV is determined by a variety of methods. Most insurance companies will use some mixture of the book value, the fair market value or the replacement cost to tell you what your car is worth.
    • If you are unhappy with the ACV value assigned to your car you can dispute it. Doing this is best achieved through additional evidence, understanding the insurance companies methodology and getting an independent appraisal done.



1 – Ameriprise Insurance
2 – Kelley Blue Book

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