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Ask the Car Insurance Expert

My car has been totaled. What is the best way to negotiate the value of the car?

Some auto insurance companies might try to lowball your vehicle’s value to save money on its end, so the best way to negotiate a fair settlement is to do some research on what your vehicle is worth so you have facts and figures ready when a settlement offer is made.

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Every auto insurance provider has its own internal guidelines for determining how much your totaled vehicle is worth – it’s actual cash value (ACV).  Though, in general, at least one of the following ways will be used:

  • Vehicle-valuation software.
  • Valuation guides, such as NADAguides and Kelley Blue Book (KBB).
  • Review of sale prices of comparable vehicles in your local area. This may include online pricing, private sales, and dealer ads and sales.
  • While you don’t have access to an insurer’s valuation software, you can look up your vehicle in valuation guides and local sales. 

KBB says to average the trade-in value with the suggested retail value of your vehicle and use the resulting number as a reference point for determining your totaled vehicle’s replacement value.

When looking at the current market value of that same vehicle in your area, an insurer typically takes into account:

  • The condition of your vehicle the moment before the accident.
  • The age of your vehicle.
  • The vehicle’s mileage.
  • The vehicle’s options.

Remember, sentimental value is worth $0 to an auto insurance company, but if, for example, your vehicle had a built-in navigation system that should bump up the amount your vehicle is worth.

For more information, read “Total warfare: What to do when your auto insurer totals your car.”

Last updated: May. 27, 2014
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