Actual Cash Value (ACV) in 2025 (What You Should Know)
Actual cash value (ACV) is an important aspect of how much you’ll receive if you total your vehicle. Insurance companies typically decide to total your vehicle when repairs would cost 75% or more of your vehicle’s total worth. ACV insurance is usually the cheapest option, starting at $32 per month.
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Zach Fagiano
Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
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UPDATED: Mar 11, 2025
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Mar 11, 2025
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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Actual cash value (ACV) is used by insurance companies in most policies to determine the value of your car and when to total your vehicle after an accident.
Most insurance policies automatically use your car’s ACV as it’s the cheapest option for coverage. However, you can get insurance that pays for your vehicle’s replacement costs instead — it just costs more.
Read on to learn more about the actual cash value in car insurance, including what it means for your coverage. Then, enter your ZIP code into our free comparison tool to see actual cash value insurance rates in your area.
- Actual cash value is how much your vehicle is worth considering depreciation
- Insurance companies use ACV to determine when to total your vehicle
- Actual cash value insurance is usually the cheapest option for coverage
Understanding Actual Cash Value
Actual Cash Value (ACV) is the amount an item is worth at the time of loss or damage, factoring in depreciation. Actual cash value in auto insurance is commonly used to determine the payout for damaged or totaled property, such as cars or homes.
Car insurance isn't the only type of coverage that uses actual cash value. Home insurance policies also make use of ACV to determine how much to pay for a claim and when the house needs to be completely rebuilt.Scott W. Johnson Licensed Insurance Agent
Unlike replacement cost coverage, which reimburses the policyholder for the full cost of replacing an item, ACV accounts for wear and tear, age, and market conditions.
Read more: New Car Replacement Insurance
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How Actual Cash Value Works
Insurance companies use an actual cash value calculator to determine the replacement cost of your car, then subtract depreciation. Depreciation is assessed based on factors such as age, usage, and condition.
For example, if a car was purchased for $30,000 and has depreciated by 40% over time, its ACV would be $18,000. This means that in the event of a total loss, the insurer would compensate the policyholder with $18,000, minus any deductible.
How is the value of your car decided after it’s totaled? Learn more: https://t.co/RhukTUHvpE pic.twitter.com/v6VMPKA1ky
— Allstate (@Allstate) April 24, 2017
Understanding actual cash value definitions is crucial to getting a good payout after an accident. Your insurance company will declare your car totaled when your vehicle crosses the total loss threshold.
It’s also important to know the actual cash value of a car if you have a loan or lease. If your car is totaled and its ACV is less than what you owe on your loan, you’ll be responsible for whatever is left. You can purchase gap insurance to prevent this. Once your loan is lower than your car’s ACV, you’ll be able to cancel gap insurance.
Actual Cash Value vs. Replacement Costs
Replacement cost coverage and ACV differ significantly in how they compensate for losses. Understanding the difference between replacement costs and actual cash value auto insurance is crucial in picking the perfect policy for your needs.
Replacement cost coverage pays the amount needed to replace the damaged or lost item with a brand-new equivalent without factoring in depreciation. This type of coverage is often more expensive but provides better financial protection. The best auto insurance for exotic cars typically includes replacement cost coverage.
Classic car insurance policies also usually include replacement cost coverage. The ACV of a classic car is often low and hard to define. Since most owners treat classic cars as collectibles, replacement costs work better.Kristen Gryglik Licensed Insurance Agent
Choosing between replacement costs insurance and ACV coverage depends on budget considerations and the level of financial protection desired. Vehicle owners should carefully assess their policy options to ensure they receive adequate compensation in the event of a loss.
Actual Cash Value Insurance Costs
When you purchase normal car insurance, your policy will most likely work with your vehicle’s ACV rather than offering replacement cost coverage. Keeping this in mind, you can check how much you might pay for ACV insurance below.
Actual Cash Value Insurance Monthly Rates by Provider & Coverage Level
| Insurance Company | Minimum Coverage | Full Coverage |
|---|---|---|
 | $87 | $228 |
 | $62 | $166 |
 | $47 | $124 |
 | $53 | $138 |
 | $76 | $198 |
 | $43 | $114 |
 | $96 | $248 |
 | $63 | $164 |
 | $56 | $150 |
 | $47 | $123 |
 | $53 | $141 |
 | $32 | $84 |
| U.S. Average | $65 | $170 |
While the rates above are a good place to start, the actual quotes you see may be different. Many factors affect car insurance rates, so you may pay more or less, depending on your situation.
This is why comparing quotes is so important. Finding the cheapest auto insurance companies is nearly impossible without comparing rates first. You’ll need personalized car insurance quotes to compare rates, which you can get by visiting the website of any provider you’re interested in.
Once you have a few quotes, you’ll have a good idea of which company has the most affordable rates. If you don’t want to spend the time filling out multiple quote applications, you can always enter your ZIP code into our free tool to see rates in your area.
How to Negotiate the Actual Cash Value of Your Car
If your car is deemed a total loss, you don’t have to accept the initial ACV offer from your insurance company without question. Here are some steps to negotiate a fair insurance settlement after a car accident:
- Review Insurance Valuation: Request a detailed breakdown of how they arrived at the ACV.
- Research Market Value: Use online valuation tools such as Kelley Blue Book, Edmunds, or local dealership listings to find comparable vehicle prices.
- Provide Documentation: If your car had recent repairs, upgrades, or was in excellent condition, present receipts and maintenance records to justify a higher valuation.
- Dispute The Offer: If you believe the offer is too low, you can counter with your research and request a reassessment.
- Consider a Professional Appraisal: In some cases, hiring an independent appraiser can provide an unbiased valuation that strengthens your case.
If you still feel like your insurance company is treating you unfairly after following these steps, it may be time to get legal help. Finding an attorney who specializes in car insurance law is usually easy, and most states have departments of insurance to help protect drivers.
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Find the Cheapest Actual Cash Value Insurance Today
Understanding how actual cash value works in car insurance will help you navigate the claims process if your car is declared totaled. The cheapest auto insurance policies typically work with the ACV of your vehicle. You can usually add gap insurance to your coverage if you’re worried about a loan or lease if your car is totaled.
When you’re ready to learn how to get auto insurance, your first step should be comparing quotes. Looking at multiple companies is the best way to find an affordable car insurance policy. Enter your ZIP code into our free comparison tool today to see auto insurance rates in your area.
Frequently Asked Questions
What is actual cash value?
Actual Cash Value (ACV) is the depreciated market value of an item at the time of loss, determined by subtracting depreciation from its replacement cost.
Is actual cash value insurance good?
ACV insurance is a more affordable option but may leave policyholders with out-of-pocket costs if depreciation significantly lowers the payout.
What is replacement cost?
Replacement cost is the amount needed to replace a damaged or lost item with a new equivalent without factoring in depreciation. This type of coverage is typically found in the best auto insurance for luxury cars and policies specially designed for classic vehicles.
Is actual cash value or replacement cost better?
Replacement cost coverage provides higher payouts but costs more, while ACV is cheaper but may not fully cover replacement expenses. If you want to purchase replacement cost coverage, you may be able to get a more affordable rate by finding the best auto insurance discounts you qualify for.
When do insurance companies declare a car totaled?
A car is declared totaled when the repair costs exceed a certain percentage (typically 70–80%) of its ACV, depending on state laws and insurer policies.
Read more: How Insurance Companies Value a Car
Does a car’s ACV change if it’s been modified?
Yes, modifications can impact ACV, but insurers may not fully account for customizations unless additional coverage is purchased.
How is ACV calculated?
ACV is calculated by determining the item’s replacement cost and subtracting depreciation based on age, wear and tear, and market trends.
Can you negotiate actual cash value?
Yes, you can negotiate ACV by presenting evidence such as comparable market values, maintenance records, and receipts for recent repairs or upgrades.
What happens if your ACV isn’t enough to pay off a car loan?
If your ACV payout is less than your remaining loan balance, you’re responsible for the difference unless you have gap insurance. The best gap insurance plans will make sure your car loan is paid off after an accident so you can get into a new car as soon as possible.
How much does actual cash value insurance cost?
ACV insurance generally has lower premiums than replacement cost coverage, but the exact cost depends on factors like the insured item, policy terms, and insurer. To see how much it will cost you, enter your ZIP code into our free comparison tool today.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Zach Fagiano
Licensed Insurance Broker
Zach Fagiano has been in the insurance industry for over 10 years, specializing in property and casualty and risk management consulting. He started out specializing in small businesses and moved up to large commercial real estate risks. During that time, he acquired property & casualty, life & health, and surplus lines brokers licenses. He’s now the Senior Vice President overseeing globa...
Licensed Insurance Broker
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.