Actual Cash Value (ACV)
Also known as: ACV, fair market value
Actual Cash Value is the dollar amount your insurance company is required to pay you for a totaled vehicle. ACV represents the price you would pay to buy a comparable used vehicle of the same make, model, year, mileage, and condition in your local market — not the vehicle's original price, replacement cost, or what you still owe on a loan.
More detail
- Most auto policies define ACV as the vehicle's market value immediately before the loss, typically using comparable-vehicle data adjusted for mileage and condition.
- Insurers calculate ACV using third-party valuation tools (CCC ONE, Mitchell WorkCenter, Audatex Autosource) that pull from local listings — but the adjustments those tools apply are where most disputes arise.
- ACV does not include sales tax, registration, or fees in some states. It also does not include the cost of repairs you never made.
Related terms
Fair Market Value
Fair Market Value (FMV) is the price a willing buyer would pay a willing seller for a vehicle in an open market, with both parties acting without compulsion and with reasonable knowledge of relevant facts. For total-loss claims, FMV is functionally identical to Actual Cash Value (ACV).
Comparable Sales (Comps)
Comparable Sales — or 'comps' — are recent sale prices of similar vehicles used to determine the fair market value of your totaled car. Insurance valuation tools build their offer by averaging adjusted prices of comps from your local market.
Appraisal Clause
An Appraisal Clause is a provision in most US auto insurance policies that lets either you or the insurer demand an independent appraisal when you disagree on the value of a totaled vehicle. Each side selects a competent, independent appraiser; the two appraisers select an umpire; and the resulting valuation is binding.
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