Getting The Actual Cash Value Of Your Vehicle

Finding the Actual Cash Value (ACV) of your vehicle is an art in itself – the market value may be one figure for one insurance company, and another figure for another insurance company. Indeed, with so many different factors affecting an insurance company’s judgment on a vehicle’s ACV, it is no wonder why different companies can come to different figures for the exact same car.Actual Cash Value Of Car

But why is it important to know your car’s ACV?

ACV – What is it, and why is it important?

The ACV of your vehicle is, simply put, how much your vehicle is worth at the time of assessment. You may have bought your car for $20,000, but you can be sure that your vehicle’s worth a lot less than what you have originally paid for when you’re assessing its ACV years, or even just months later.

This is because your car’s ACV falls immediately after it leaves the dealership’s hands by up to 30%! Even though your car is still “brand-new” when you’re driving it away from the dealership’s store, assessors will still count it as “used” once you lay your hands on it. We’ll talk more about calculating the ACV in the next section.

Knowing the ACV of your car is important, because insurance companies will be paying you that sum if you somehow end up totaling your vehicle. Understanding how ACV is calculated can help you negotiate a better ACV for your vehicle, thus increasing your insurance payout for your vehicle.

Calculating the Actual Cash Value of your car

In the calculation of your vehicle’s ACV, a few points are taken into account:

  1. The age of your vehicle – obviously, the older the vehicle, the lower the ACV because of wear-and-tear.
  2. How well you take care of your vehicle – do you turn up for servicing before the stipulated mileage? Do you change the vehicle’s engine oil as recommended by the mechanics? Doing this will increase your vehicle’s ACV as it proves that your vehicle is well-maintained.
  3. Vehicle Modelthe model of your vehicle can affect your ACV. For example, if there’s a particular model that has been recalled because of faults, you will find the ACV of your vehicle much lower than other similar models of the same age.
  4. Mileage – the lower your mileage, the higher the vehicle’s ACV, as there will be less wear-and-tear due to lower vehicle usage
  5. Accidents – If your vehicle has never, ever been in an accident before, your ACV will be much higher compared to a vehicle that is in a less-than-pristine condition.

In addition, there are certain standardized methods to calculate a vehicle’s ACV, such as the Kelley Blue Book (KBB) or the NADA guide. These guides rate vehicles using several markers to determine the category of a vehicle. There are 6 categories in total, ranging from “pristine” to a “basket case”.

Your vehicle’s ACV – Why don’t you just ask the insurance companies?

Sadly, insurance companies are often reluctant to reveal the actual manner in which they determine your vehicle’s ACV when you are trying to claim the payout from them. Most insurance companies uses the KBB or NADA guide to determine your vehicle’s ACV using the category and points system, but the points given are subjective – a strict employee will be less generous with points than a lenient one.

There is reason behind this decision – every car owner will want to get the most out of their payouts, and they will never let go of an opportunity to dispute the assessment of these insurance companies. Indeed, with such subjective means of determining the ACV of your vehicle, who wouldn’t dispute the assessment in an effort to get a few thousand dollars more from the payout?

Is it possible to dispute the assessment of your ACV?

It definitely is! However, you must know that this is not easy – as insurance companies don’t release the exact details of how they assess your car’s ACV, it is hard for you to nitpick exactly which area they might have assessed wrongly.

Of course, there are blatant errors, such as “dents on the doors” when there obviously isn’t. Bring these up to your insurance company – these errors will definitely help boost your ACV. In addition, it is a must to have evidence to back up your arguments – while the previous examples simply warrants a simple visual check on your car doors, other points of dispute such as servicing will require proof from the car workshop to substantiate your stand.


Do keep in mind that insurance companies are just like any other corporation – their main motive is to reduce cost and increase revenue, thus increasing profits. This makes it tough for insurance companies to bulge from their final assessment of your ACV. Of course, argue for the ACV that you think is fair if you decide that your insurance company has underestimated your vehicle’s ACV.


  Comments: 10

  1. I recently put insurance on my 1987 caprice with Usaa but before I put insurance on I got specific detail on my policy before adding. I put custom equipment insurance to insure my 28 inch rims which they told me were covered up to 5000 unfortunately I live in a bad area and my wheels were stolen I went through the correct procedures to file a claim note that my wheels are $8500 I sent all the receipts pictures and all. They finished my claim and came up with around $1500 I’m trying to figure out how they came up with that number? Was I mislead

    • sounds like you were. I hate the term “UP TO” . If they told you “up to”, I would ask them to explain how that is calculated. When my car stereo was stolen and window smashed they actually paid me more than it cost me to repair.

    • With USAA. My daughter’s car got wrecked, total loss. They were way off on the “blue book” value and was NOT able to replace her loss. I called and asked them for my “new” car, in the event of a total loss, how much would I get? Guy stuttered because this was the forbidden question. I was put on hold and then told me the underwriters would value my car based on “Actual Cash Value” or ACV and could not give me that number. I said that is ridiculous. Value of my car for my region is well known. So they have a way to undervalue your car and NOT pay what it is worth. He could not tell me how or who could give me a rough estimate. They do however, sell insurance addon that gives me ACV + 20%. So yes, you were misled. Get the word out.

      • Geico defines ACV as “The fair market value of property; technically, replacement cost less depreciation.”

        But doesn’t “fair market” account for depreciation?

        • Andrew@4AutoInsuranceQuote

          Hi Tim,
          You are mainly correct, although you have to remember that ACV applies to many industries, and not just auto insurance. It’s necessary for insurance companies to use the word depreciation in their definition because there would be some instances of fair market value not taking it into account.
          Regarding your claim, as you are finding out, sometimes insurance companies don’t handle claims well. You shouldn’t have to fight your own insurance company, but sometimes it’s necessary. If you are certain on the value of your car, then you’ll need to get documentation. For example, show the blue book value, or get written statements from auto dealers in your area for what they would pay for the car. If you show these to your insurance company, they’ll likely pay you more.

  2. This article was a waste of my time, since it does not even attempt to answer it title’s purpose: “How to Find Out the ACV of Your Car.”

  3. I totally agree with Fabrice. This article was a total waste of my time! No formula provided, nothing, just more BLAH, BLAH, BLAH about nothing! Recommendation….change the title or remove!!

  4. If car insurance adjuster says she gonna pay you cash value for your parked hit car

  5. Jennifer Lipscomb

    I think driving the point home that there is no way to give a formula for acv might help.
    From my understanding in this article, there are too many variables to accurately access a standard formula. Which is why insurance still has people employed as adjusters and not a computer.
    Take for instance, car care and maintenance, or additional options added to the vehicle that wouldn’t be included on the vin, including tire life, and that curb you ran into that scraped the rim.
    Obviously, insurance is a business and it’s more fiscally responsible to hire adjusters than to have a machine crank out acv based on consumer provided information; which we ALL know is NEVER fraudulent or an exaggeration of the truth. 😉

  6. Greetings: Yes I agree w/ above on 2 points: 1) This site is misleading. Better titled as ACV forum. 2) When starting the policy on the truck I was told ” If anything happens to your truck your covered”. It was damaged by ‘hit and run’ now State Farm says an early 90s C1500, 200,000 mi, never wrecked, in top shape will payout less than $300 if totaled. My 4L60 trans is worth more than that…on the ground. They lied and still lie about the ACV. Crooks. To all of you who have older vehicles. Only get the minimum because the extra coverage is not worth the $. Also the government, insurance and auto makers are in a conspiracy 2 rid us of our prized possessions and try to keep us paying on the new junk being built.

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