The average vehicle will lose about 60% of its original value after 60 months, according to Kelly Blue Book. However, some cars, trucks and SUVs can outpace this average and retain more value down the road.
In the case of a total loss, an insurance settlement is based on the car's actual cash value, which factors in depreciation for age, mileage, physical condition and other factors.
The vehicle's true value can also have an effect on GAP insurance payments for those with that coverage. Currently, GAP insurance writers are experiencing a favorable claims environment and loss ratios are positive. This is due to supply chain issues slowing automakers' production as well as higher demand for vehicles because of stimulus payments, enhanced tax credits and low interest rates, according to AmTrust Financial.
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Steve Hallo
Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected]
