Actual cash value of my car

Share

Here’s How To Determine The Actual Cash Value Of A Car

Blog/ Here’s How To Determine The Actual Cash Value Of A Car


If you’ve ever asked the question “What is the actual cash value of my car?” then it means you’re looking to learn how you can calculate your car’s ACV.

Sounds like you? Well, you’re in the right place.

Value is subjective. Plus, when it comes to determining what your car is worth, there are many myths out there that will leave you more confused than informed.

In this article, we’ll explain all there’s to know about the actual cash value of your car and eliminate all the incorrect views you might have.

Ready? Let’s get started…

What Does ACV Mean?

Want To Sell Your Car Without The Stress?

We can simply define ACV as the term used for something different from what you naturally thought it would be. It’s not what you thought you could get when you sell your car. We mentioned earlier that value is subjective but when it comes to ‘price’, it’s different. Price isn’t value.

If your car got wrecked in an accident and your insurance company considers it a total loss then it means you’ll be paid for the totaled car.

However, you won’t be paid the same amount you paid when you got your car unless you have some sort of extra coverage over your car. What they pay you for your car is its ACV.

In the insurance world, the ‘ACV’ term is used quite frequently. When it comes to your car, it means your car’s value as determined by your insurer.

You might have heard many times that a new car loses some percentage of its value once you drive it off the lot.

Let’s say you paid $15,000 for your new car and you drive it home. Then after 30 minutes or an hour, you probably had a change of heart and decided to sell it to your neighbor who seems interested. Then your neighbor offers you $14,000 for the car instead of the original amount you bought it even if you’ve kept your car in perfect condition.

This doesn’t mean your car’s value changed under 30 minutes or an hour, it just tells you that your car’s ACV has changed.

With that said, ACV is the amount that’s equal to the replacement cost [of your car] minus your car’s depreciation. It is the actual value for which your car could be sold, which is often lesser than the amount it would cost to have it replaced.

How Is ACV Calculated?

When it comes to calculating your car’s actual cash value, most insurers make use of an industry formula and also take into account its mileage, make/model, age, if it had any parts replaced and the prices of other cars that are similar to yours.

So, you can find out that your car’s ACV is hundreds or thousands lower than the amount you got it.

In calculating your car’s ACV, you should consider the following:

  • Your Car’s Age: We’re sure you already know that the older your car, the lower its ACV as a result of wear and tear.
  • Your Car’s Condition: You can start by answering these questions; do you service your car as regularly as you should? Do you change its engine oil according to your mechanic’s recommendations? You might be wondering why this is important. Well, a well-maintained car is more likely to have an increased ACV than when it’s not well-maintained.
  • Your Car’s Model: Your car’s model can affect its ACV. How? Well, let’s say there’s a specific model that has always been recalled due to faults. This means you should expect a much lower ACV than other similar models of the same age as your car.
  • Your Car’s Mileage: The lower your car’s mileage, the higher the ACV of your car. This is because there would be less wear and tear as your car’s usage level is low.
  • Accidents: If your car has never been in an accident or experienced any then you should expect a higher ACV than when it’s in a less-perfect condition.

Besides all these we’ve mentioned, you can also make use of online guides like the NADA guide to calculate your car’s ACV.

Besides all these we’ve mentioned, you can also make use of online guides like the NADA guide to calculate your car’s ACV.

Should I Accept the ACV When My Insurance Company Totals the Car?

You don’t have to if you don’t want to. Indeed, most insurance companies won’t be so open on revealing how they calculate your car’s ACV when you’re looking to claim the payout from them.

Some dishonest insurance companies might want to lowball you on your car’s ACV. Even those who aren’t fraudulent won’t still give you what your car is worth as they also want to increase revenue and reduce costs.

So, if you feel you’re being offered too little then you can dispute the assessment of your car’s ACV with your insurer. You’d have to bring up proofs on why you think your car is worth more like getting an independent appraisal done and so on.

Related posts

  • RECENT POSTS

  • CATEGORIES

  • ABOUT

    Cash for Cars Long Beach pays Cash for Cars, Trucks & Vans. Offering more than anyone for your car guaranteed, don’t wait call now and sell your car in 30 minutes or less.
    866-349-3009   –   562-881-5841

  • TAGS

  • hello.