Actual Cash Value (ACV): Definition, Example, Vs. Replacement (investopedia.com)

What Is Actual Cash Value?

Actual cash value (ACV) is the amount equal to the replacement cost minus depreciation of a damaged or stolen property at the time of the loss. The actual value for which the property could be sold, which is always less than what it would cost to replace it.
I'm telling you from experience. It is as if you walked into a dealership who didn't want to buy your car and you begged them to buy it. The result would be a lowball offer that is less than wholesale cost. It's a direct result of insurance company lobbyists throwing money at politicians for their campaigns. The result is terrible for insurance customers but great for the insurance companies.

 

Right, it's talking about the difference between replacing with new and replacing with used. There is not much of a market for used roofs on houses, so ACV may be applied. However, there is a market for used cars, so it is assumed that your used car is the same as another of the same year, make, and model.

I can't comment on why your insurance company set your ACV so low without knowing all the facts. If you had Blue Book numbers higher than what you paid, they were asking for a lawsuit.

 

It's like buying wholesale and selling retail except it's the insurance company giving you wholesale type money. Good luck getting a certified MB at wholesale cost.

 

By the way, your ACV definition from Investopedia is referring to property for which there is no used marketplace - specifically homeowner's insurance. There is no market for used roofs, for example. The article loosely commingles vehicle and real property insurance; the two are quite different. I would look elsewhere for insurance advice.

Here is the section from Investopedia explaining replacement cost coverage: Under replacement-cost coverage, the insurer would pay the amount required to replace the covered item with a like-kind new one.

That is where depreciation comes in: In the absence of a marketplace for that car, one would take the new car and depreciate it down. Now, it is possible that your insurance company decided to depreciate your car down to near zero because you had gap coverage and for whatever reason they decided to not research the value but just went with new less depreciation, letting the gap coverage make up the difference. I am confident they would have given you a fair price for the vehicle if there had been no other coverage, or they would have enjoyed you reporting them to the insurance commissioner and taking them to court.

You generally insure your real property for replacement cost, because simply buying an equivalent used house is difficult to impossible. Thus you insure it to pay for replacing it with new.

For cars, there is generally a solid used marketplace, making their value easy to determine. You get the cash to buy the equivalent automobile to replace it. Same make, model, year, mileage, condition. This will be less than you think it is worth because you know and love your car - and no one will pay you for the power steering pump you just put in it. Like it or not, when you perform repairs, you will only get that value out if you continue driving the vehicle. The value is gone as far as anyone else is concerned, buyer or insurance company.

 

The end of an era!

Everything was handled within 10 days. Car was crashed into on the 15th, we agreed to payout on the 20th, money was deposited on the morning of the 23rd, and vehicle was picked up this morning. Damn, it was a good vehicle for us. I hope someone buys it at auction and rebuilds it, but chances are it will get parted out. If anyone wants a good project, see if it shows up on Copart, VIN is 4JGBF71E07A192935

 

 

The end of an era!

Will you get another GL or something else?

 

The GL is just too big for our current needs, so looking elsewhere. Actually was too big for 95% of our previous use, and we just dragged around the extra mass for fun!!! Where the GL excels is going down the freeway at 85mph, five people, two dogs, all our crap, and just cruising for hour after hour. Man that thing was great at that! But we only did that two or three times a year. The rest of the time was commuting and navigating the Trader Joes parking lot. Not so great at those tasks, maybe that's why I didn't get pictures of that :-)

We're a long-time BMW family, so settling on a 2013 X5. The GL was actually the outlier, but we accepted it! The X5 is a bit smaller but still has good cargo capacity. Definitely gets better mileage which I'm looking forward to! Best part is that I know the cars front/back, although the turbo N55 is adding something new to the mix. We're in the process of buying the one I linked to above (posting is removed), just waiting for the title to get processed by the DMV to show clear ownership.

Sneak peak:


FWIW, I have some parts for sale I just posted on local CL: https://inlandempire.craigslist.org/...81537376.html#
I hope someone can use these... LMK what you can use and shoot me a good offer for what you think it's worth!!! Everything would be pretty cheap to ship except maybe the mats, but even those won't be thaaaat bad to ship.

 

I have wrestled with this very point. I have considered getting a small commuter car for the 85% you mention. The GL was bought for a family of six, so it was "needed" for that. Now it is just me, but I still "need" the GL's off-road and hauling ability - need to have it in reserve. If I got a small commuter car for the rest of my driving, savings in gas would about break even on the insurance cost - and then the motivation to continue repairing and maintaining the GL would plummet.

 

We had no intention of getting rid of it, as it was paid for, well-maintained, and still incredibly useful that other 5% of the time. I planned to keep it for the next four years to take the kids back and forth to college, as well as family trips, camping, hauling washing machines, etc. GREAT to have for all that! Decided to not replace with another X164 or 166 is that we hope the X5 does all of the above but in a smaller package so just more enjoyable to drive. I tell you, I will NOT miss those over-sized A-pillars in the GL you can't see around! :-)