1. What is Actual Cash Value (ACV)?

Actual Cash Value (ACV) is the market value of your vehicle minus depreciation at the time of the loss. It's the amount your insurance company will pay if your car is totaled in an accident.

2. How Does the Calculator Work?

The calculator uses the ACV formula:

Where:

• Market Value — The current value of your vehicle if sold in the market
• Depreciation — The decrease in value due to age, mileage, and condition

Explanation: Insurance companies use ACV to determine payout amounts for totaled vehicles, considering the vehicle's pre-accident condition.

3. Importance of ACV Calculation

Details: Understanding ACV helps you know what to expect from an insurance claim and whether you might need gap insurance to cover the difference between ACV and what you owe on your loan.

4. Using the Calculator

Tips: Enter the current market value of your vehicle (check sources like Kelley Blue Book) and the estimated depreciation. Both values should be in dollars.

5. Frequently Asked Questions (FAQ)

Q1: How is market value determined?
A: Insurance companies use various sources including dealer quotes, market surveys, and valuation guides like Kelley Blue Book or NADA.

Q2: What factors affect depreciation?
A: Mileage, age, condition, service history, accident history, and market demand all impact depreciation.

Q3: Can I negotiate the ACV with my insurer?
A: Yes, you can provide evidence like recent repair receipts, maintenance records, or comparable vehicle listings to support a higher valuation.

Q4: What if I owe more than the ACV?
A: This is called being "upside down" on your loan. Gap insurance would cover the difference in this case.

Q5: Does ACV include sales tax?
A: Most states require insurers to include sales tax in the ACV payment, but this varies by location.