Skip to Main Content

What is the actual cash value of my car?

Written by Edited by
Published on September 18, 2024 | 5 min read

Bankrate is always editorially independent. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation of . Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our . Our is to ensure everything we publish is objective, accurate and trustworthy.

Man looking into car in car dealership
Westend61/Getty Images

Understanding your car’s actual cash value (ACV) might be necessary when you are buying or selling a car, refinancing or need to know the car insurance market value for a claim. But how do you find out your car’s ACV? In this guide, Bankrate’s insurance editorial team helps you find the answer to the question: how do I calculate the ACV of my car? 

Why does value matter when my car is totaled?

Insurance companies define a car as totaled when expenses to repair the vehicle exceed the car’s value. Many insurance companies will reimburse you for your vehicle’s ACV in this case, which is the cost of your car minus any depreciation in its market value. If your vehicle is older, this means that your insurance payout will not cover the cost of purchasing the same vehicle in a newer make and model.

If you disagree with the ACV of your car in a totaled situation, you may be able to negotiate or appeal your claim with your insurance company. You will need to prove that your car value is higher than the value your insurance company determined and will have to provide detailed records of your car’s maintenance.

If you own a rare or particularly expensive vehicle, it is not a bad idea to have it appraised by a licensed appraiser periodically so that you have proof of its current or recent value in the event it is totaled.

What is the actual cash value of my car? 

There are a number of reasons why you might ask, what is the ACV of my car? ACV is used to determine how much of a payout you will receive for a totaled vehicle. It is determined by the replacement cost of your vehicle minus depreciation, which considers things like age and wear and tear.

Most insurance policies cover the actual cash value of your car in the event of a claim and will use a third party to determine the ACV of your vehicle.

Replacement cost, or the cost to replace your vehicle with a similar and sometimes newer model at current prices, is available through some insurance companies. However, a car insurance policy that includes replacement cost rather than ACV will have higher premiums to account for the potentially higher payout with a claim.

Why does value matter if my car needs repairs?

Even if your car is damaged without being totaled, knowing its value matters. After you file a claim, your insurance company will send a claims adjuster to inspect your car and determine how much it will cost to repair your vehicle back to its original condition. The adjuster will evaluate your policy, the reasons behind your car’s damage and the actual damages to determine how much the repairs will cost.

After the claims adjuster determines the amount the insurance company is willing to pay to repair your vehicle, you can either sign a release to accept the payment and make the repairs or reject the assessment and try to negotiate the claim. If you reject the adjuster’s assessment, it is essential to understand the value of your car before attempting to negotiate with your insurance company.

How does my insurance company calculate the ACV of my car?

Your insurance company calculates the ACV of your vehicle based on many factors, including make and model, mileage, overall condition and ZIP code. Even very similar makes and models can have drastically different ACV calculations based on these factors. For example, vehicles that are driven more frequently in harsh weather conditions generally have more wear and tear, which can cause the vehicle to depreciate faster than a car that operates in a moderate climate. Different insurance companies have different algorithms for coming up with ACV, but most calculate current market value minus depreciation, often using third-party data sources to inform their calculations.

Negotiating an insurance claim

Auto insurance companies are for-profit businesses like any other and want to pay out the lowest amount possible to settle a claim. Should you decide to negotiate with your insurance company about your claim, you should be prepared to prove that your proposed estimate is more accurate than theirs.

Researching the value of your car using KBB, Edmunds, NADA or even a third-party appraiser or claims adjuster can help determine your car’s value and give you a sense of what is a fair payment to settle a claim.

If your claims adjuster and insurance company are unwilling to revise their estimate based on your argument and evidence, you can ask for justification of their estimate. The goal of the negotiation is to reach a satisfactory settlement for all parties.

How to find the value of a car

You may find that your insurance company or car dealership follows their own guidelines for determining your car’s value. But when calculating your own estimate, you can follow some general guidelines.

A few steps to determine your car’s value include:

  1. Research car price guides and websites like Kelley Blue Book (KBB) and Edmunds.
  2. Determine what you want to do with your car, such as trade it in, sell it to someone else or a car company, etc.
  3. Compare similar vehicles for sale online.
  4. Determine if your car is damaged or needs any repairs.
  5. Determine other factors that can raise or reduce your car’s value, such as location, accident history, year of car and number of owners.

What do the different types of car values mean?

There are also different types of car valuations. These values usually differ from your insurance company’s determination of value and ACV since your provider will consider your car’s depreciation and replacement costs when calculating the value.

  • Trade-in value: This is the value of your car after trading it in to a dealer for another car. Trade-in value is calculated after the dealer assesses your vehicle’s condition and factors in what they think they can sell it for. Trade-in value is typically the lowest of the values for a car.
  • Private party resale value: This is the value you can expect to sell your car at directly to a private buyer. Your vehicle will be sold in its current condition with the private party value and will have no warranty. The final price will be determined by similar vehicles and local market conditions, so these values can fluctuate quite a bit.
  • Dealer retail value: A dealer retail value is the price a dealer will sell your car for after any repairs or modifications have been made. This value will also include a profit margin for the dealer.
  • Certified pre-owned value: A certified pre-owned value is the value of a vehicle that has been inspected by third-party inspectors. Vehicles backed by certified pre-owned factors include a factory warranty and other benefits. Given the additional guarantees and benefits the new owner will get, along with the cost of certifications, this is typically the highest valuation for a used car.

Online pricing guides and estimators

Plenty of factors go into determining the value of your vehicle, including the condition of the exterior and interior, any mechanical issues, your ZIP code, and the year, make and model of the vehicle. While these factors tend to be straightforward, broader macroeconomic factors like demand for used cars can also affect your vehicle’s value. Fortunately, there are a few different organizations that specialize in evaluating the used vehicle market, allowing you to estimate your car’s worth with a few simple clicks.

It is a good idea to compare the value of your car using multiple tools to get a better sense of what it is worth. To use Edmunds, NADA and KBB, you will need your vehicle year, make and model, vehicle identification number (VIN) and license plate number and state. You will also be asked some questions about the vehicle’s condition and any damage it has sustained.

Frequently asked questions