actual cash value calculator

If your vehicle is destroyed in an accident or by another covered peril, your insurer will send you a check for the actual cash value, or ACV, of your vehicle. The actual cash value takes depreciation into account when determining a value for your car, which can lead to a smaller payout check than you might expect.

What is actual cash value, or ACV?

The actual cash value of your vehicle is its pre-collision value as calculated by your insurer. This is the amount your insurance company will pay out if it is stolen or totaled after subtracting your deductible.

So, how do you determine actual cash value? Insurers take a variety of factors into account when determining the insurance valuation of cars. They look at the vehicle’s age, mileage, and any past accidents it has been in or unrepaired weather issues such as hail damage.

They are taking depreciation into account and trying to determine the car’s fair market value, what you would have been able to sell it for before it was destroyed.

The ACV will usually be dramatically less than what you paid for the car. This is true even if the wrecked car is only a few years (or months) old. While cars are necessary for everyday life, they are not a great investment.

According to Edmunds, on average new cars lose 23.5% of their value after a year, and by the time you have owned it for five years, it has lost 60% of its value.

How do you determine actual cash value?

There are a few different ways to answer the question, “what is my car’s actual cash value?” Here are a few tips to help you calculate your vehicle’s ACV:

Manually calculate the actual cash value of your car

How to calculate actual cash value? The first step in calculating actual cash value is to research your vehicle online and determine what you would have to pay to replace your vehicle with a similar one. Look for the same year, make, model and trim level at dealership sites and direct sell sites such as eBay, Autotrader or Facebook.

Once you have determined what it would cost to replace your vehicle, deduct for wear and tear on the vehicle and any past claims or damage that has not been repaired.

Online depreciation calculators for ACV

Most major insurance companies have depreciation calculators on their sites, like most car-selling or automotive-related websites. These calculators will gather information about your vehicle and then crunch the numbers for you.

As there is no exact formula for calculating depreciation, expect a variety of estimates. Average them out to get a more accurate number.

Here are a few calculators to consider:

Actual cash value vs. replacement cost

While ACV is the standard in auto insurance, some insurers offer a replacement cost policy. Replacement cost policies are commonplace in the world of homeowners insurance but not commonly used when it comes to auto insurance.

With homeowners insurance, a replacement cost policy replaces your damaged or destroyed item with a brand new one of similar quality regardless of how old it is or how much depreciation it has suffered over the years.

For example, if you paid $5,000 for a couch six years ago that was destroyed in a fire, an actual cash value policy would take depreciation into account, and you may get $1,000 for your couch.

A replacement value policy would put a brand-new couch of similar quality (or the same one if they are still selling them) in your home.

Regarding auto insurance, replacement value policies are not very common. When available, they are often called a new car replacement endorsement on your policy and usually come with requirements.

As an example, Liberty Mutual will only write a new car replacement endorsement for vehicles that are:

  • Less than one year old
  • Have less than 15,000 miles
  • Not a lease

Details of these policies and their requirements vary by insurer, but in general, this coverage will replace your car with the same model if it is deemed a total loss. In most cases, the vehicle has to be brand new or very close to it. You must carry full coverage, including comprehensive and collision insurance, to qualify for a replacement value policy.

Here are a few of the qualifiers required by major insurers:

  • Allstate: Vehicle must be less than two model years old
  • American Family: Can only be purchased for brand-new vehicles
  • Farmers: Can only be written for vehicles insured with Farmers upon purchase of the car and the vehicle must be less than two years old and have 24,000 or fewer miles.
  • The Hartford: Will replace a totaled car that is 15 months or less old or has 15,000 or fewer miles of the accident.

How does actual cash value work?

The big question most drivers have is, how is actual cash value determined by insurance companies? Most insurance companies use proprietary formulas to calculate a vehicle’s ACV, which means no two insurers are likely to give you the same figure.

It should be noted that if you are in an at-fault accident, you will only be paid out on your vehicle if you carry collision or comprehensive coverage. If you are only carrying liability coverage and are in an at-fault accident, the cost to repair or replace your vehicle will fall on you.

Remember, collision insurance only repairs your vehicle if it is damaged in an accident, while comprehensive picks up the tab if the vehicle is stolen or damaged by the following:

  • Theft
  • Vandalism
  • Fire
  • Natural disasters (like a hurricane or a tornado)
  • Falling objects
  • Damage from animal strikes
  • Damage caused during a civil disturbance, like a riot

Insurance companies will look at the car’s condition, age, mileage and any documented damage to the vehicle. They will also look at what comparable vehicles (comps) in your area are selling to help them determine a fair market value for your car. In most cases, your insurer will show you the comps they use to develop their valuation if you ask.

What is the actual cash value of my car? Your insurance company may also use a computerized evaluation process to help them determine your vehicle’s actual cash value.

Insurance companies purchase third-party computer systems (such as CCC) that help them estimate automotive claims and collision repair costs. Third-party software supplies insurers with software and a database that helps determine the value of a vehicle.

When it comes to the ACV of your specific vehicle, the figure your insurer comes up with may seem fair to you, it may be more than you expected or it could be a disappointment. The good news is that this number is not set in stone. You can dispute it.

What do I do if I am unhappy with my insurance company’s valuation?

If you feel the valuation of your vehicle is too low, you can dispute their number. You will need to find comps that support your argument for a larger claim check. Look for vehicles for sale in your area: the same make, model and trim level and in roughly the same condition as yours.

Here are a few other tips when disputing your insurer valuation:

  • Search for cars at dealerships that match your vehicle.
  • Check online marketplaces as well Craigslist, Nextdoor and Facebook.
  • Check Kelley Blue Book for a valuation of your car.
  • Pull a Carfax report on your specific vehicle.

If the numbers support your argument, present your documentation to your insurer and ask them to reevaluate their claim valuation.

What if the actual cash value isn’t enough?

There are a few options to help soften the blow of an actual cash value claim check. Gap insurance or a new car insurance endorsement will help ensure you have enough money to put a new car in the garage if your ride is totaled.

Gap insurance

Gap insurance can help you cover the gap between your vehicle’s actual cash value and the outstanding balance on your loan or lease. Gap insurance tends to be very affordable for the coverage it provides. According to the Insurance Information Institute, you can expect to pay around $20 a year for this coverage.

Read more about the cost of gap insurance — how much can you expect to pay?

New car replacement insurance

New car replacement coverage is only available for people driving new vehicles. If you fall into that category, you will need to decide if the additional premium is worth it to cover the risk of you totaling your vehicle.

While the cost for this coverage will vary depending on your insurer, generally expect to spend about five percent more than you would on a normal auto insurance policy.

What is the difference between stated value and agreed value insurance?

These policies are common for classic and other collectible cars, but there are big differences:

Stated value coverage

With this type of coverage, you decide how much insurance you can afford for a specialty vehicle. These policies are designed to help people who own a car worth more than they can afford to insure.

Agreed value coverage

With an agreed value policy, you and your insurer will agree on the vehicle’s value and if the vehicle is totaled, you will be paid the agreed-upon amount. There is no actual cash value clause in these policies; depreciation will not factor into the valuation; you will be paid the agreed value.

While these policies offer more robust coverage than a stated value policy, they are also more expensive.


Insurance Information Institute. “Gap Insurance Explained by III” Accessed August 2022.