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How is actual cash value determined on a brand-new vehicle?
My new Hyundai Tucson was totaled the day after purchase. I was declared not at fault in the accident. I'm waiting for the other party's insurance company to get back to me with the actual cash value, but I'm not sure what that means. My vehicle is financed and I made a $4,000 down payment.
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“We are so sorry to hear about the accident!
The
actual cash value
(ACV) is the cost of the vehicle minus depreciation. Since your vehicle is brand new, its cost will most likely be based on the manufacturer’s suggested retail price (MSRP).The insurance company will determine the amount of depreciation and subtract that from the MSRP. And yes—although it sounds strange—new cars lose value the moment they’re driven off the lot.
Since your vehicle is financed, the biggest concern will be whether the ACV will cover the amount remaining on your loan. Since you made a down payment—and if you got a good deal on your Tucson—you may be less likely to owe more on your vehicle than it is worth.
If you have
gap insurance
, this would protect you in the event that the value of your vehicle is worth less than what you owe.Accidents happen and are at times beyond our control—which is why it pays to have great car insurance. If you feel your coverage is lacking or you’re paying too much for it, download the
Jerry
app. A licensed broker that offers end-to-end support, the Jerry app gathers affordable quotes, helps you switch plans, and will even help you cancel your old policy.”View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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