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.

Answer
“The actual cash value 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 need to determine the amount of depreciation and subtract that from the MSRP. And yes, the Tucson has lost some value, even after just one day.
Since your vehicle is financed, the biggest concern will be whether the actual cash value 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.
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Emily Maracle
Answered on May 07, 2021
Emily Maracle is a car insurance specialist living in New York. Originally from the Pacific Northwest, she has a degree in English Literature and a background in customer service. She enjoys cooking, gardening, and living sustainably. In the future, she can't wait to upgrade to a hybrid or electric car.
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