How can we know our automobile’s ACV (actual cash value)?


We may encounter car accidents at the least expected time. No one has the ability to know when one would be a victim of such, or how it will occur, and what can be its implications when it comes. Also, we cannot choose the damage that car accidents may bring to our vehicle. In fact, the chance of our vehicle getting totalled may be equal to the risk that our vehicle getting involved in an accident. In this situation, the importance of insuring our car comes to actuality. Likewise, knowing the actual cash value of our vehicle is necessary.

When we go to our insurers and file our claims, one of the most important factors to be considered would be the actual cash value (ACV) of our vehicle. Technically, ACV is the actual worth of our car after it is totalled. There are many factors to be considered when valuating our car, but usually, the most important one to be measured is the amount our car has when it is in sale or traded-in at present.

Fortunately for us, due to the advance of technology, there are already many tools available to compute for this amount. These tools may be different in approach, but generally, they have the same principles and offer relatively close cash valuations of our totalled car. Such tools include Edmunds, NADA, and KBB or Kelley Blue Book. Generally, these valuation tools commonly include to their computations factors such as the value of our car when it is traded-in in the local market, current retail prices of our auto, and also private party values. Plus, such tools also put into consideration the actual mileage of our car, its actual conditions, and its vehicle options.

In addition to these general factors, the Kelley Blue Book approach also uses other factors to make their ACV computation more accurate, for KBB can actually give the amount that your insurance company can offer when you need a settlement from your car insurer. In practice, the Blue Book method says that insurance companies must also include in their respective computations the average of the car’s trade-in and retail value for them to be able to compute in a fairer manner the car’s replacement value. Likewise, it also helps to see the cash value of vehicles with similar characteristics and conditions. Taking into account mileages and selling prices of similar vehicles with similar conditions proves valuable.

In case of insurance companies, it is very difficult to see how they compute your vehicle’s ACV, for they have varying computation methods that still depends on their current insurance policies. However, they usually involve KBB and NADA methods to their valuations.