# What is actual cash value?

> Actual cash value is an estimate of property's value immediately before a covered loss, accounting for factors such as age, condition, mileage, and local market data.

Glossary date: May 4, 2026.

## How it works

Auto policies often use actual cash value to set the most payable for a stolen or totaled vehicle, subject to the contract and deductible.

## Example

A car bought years ago for $28,000 has a current pre-loss value of $15,500. A total-loss settlement is based on the current value, not the original price.

## Why it matters

A loan balance can be higher than the vehicle's actual cash value.

## What to check on your policy

Review the valuation report for the vehicle description, options, mileage, condition adjustments, comparable cars, taxes, and deductible.

Coverage, definitions, limits, and legal requirements vary by policy and state. Your declarations page and policy forms control your coverage.

## Related terms

- [Total loss](https://locations.goautoinsurance.com/car-insurance-glossary/total-loss.md)
- [Coverage limit](https://locations.goautoinsurance.com/car-insurance-glossary/coverage-limit.md)
- [Car insurance deductible](https://locations.goautoinsurance.com/car-insurance-glossary/car-insurance-deductible.md)

- [Car insurance guide](https://locations.goautoinsurance.com/car-insurance-guide.md)
- [Complete glossary](https://locations.goautoinsurance.com/car-insurance-glossary.md)