How to use the total loss settlement estimator
- Enter the actual cash value from the settlement offer.
- Enter your deductible, any sales tax rate added to the settlement and any title and registration fees.
- Enter the loan balance and, if you keep the vehicle, its salvage value.
- Read the net settlement, the amount that goes to the lender, and the gap or the money left for you.
Formula
Gross settlement = actual cash value + sales tax added + title and registration fees
Net settlement = gross settlement - deductible - salvage value kept
To the lender = the smaller of the net settlement and the loan balance
Gap = loan balance - net settlement, when this is positive
The sales tax rate is whatever your settlement uses. The tool does not know any rates and starts with zero.
A $15,000 car with a $16,500 loan
With a 6% tax added ($900), $100 of fees and a $500 deductible, the gross settlement is $16,000 and the net settlement is $15,500. The lender takes all $15,500, and $1,000 of the loan is still owed. This is the gap that gap coverage is meant for.
With the same car but a $12,000 loan and no tax or fees, the net settlement is $14,500. The lender is paid $12,000, and $2,500 is left for you. If you keep a damaged vehicle with $1,800 of salvage value and no loan, the net settlement falls to $12,700.
Why a loan can be bigger than the payout
A car loses value quickly, especially in the first years, and a loan with a small down payment or a long term can leave you owing more than the car is worth. A total loss settlement is based on what the car was worth just before the loss, not on what you still owe. The deductible takes more off, so the gap can be larger than the difference between the value and the loan.
Insurers value cars from sales of similar vehicles, and the offer can often be discussed with evidence such as records and comparable listings. Ask for the way the value was worked out.
What to check
Rules about tax and fees in a settlement differ by place and insurer, so enter only what your own offer lists. This tool does not decide a claim. See the Negative Equity Calculator for how a loan can exceed a car's value, the Car Depreciation Calculator for value over time, the Car Sales Tax Calculator for the replacement car, and the Private Sale vs Trade-In Net Proceeds Calculator for selling one yourself.
Assumptions and limits
- The actual cash value, tax and fees come from your settlement offer.
- The deductible and any salvage value are taken off once.
- The figures shown are examples. Use the amounts from your own claim.
- The estimate is not a claim decision and does not include rental or other benefits.
Frequently asked questions
What is actual cash value?
It is the insurer's figure for what the car was worth just before the loss, which is not the same as the price you paid or the loan balance.
What is gap coverage?
It is an add-on that pays part or all of the difference between the settlement and the loan. This tool only shows the size of the difference.
Why is there a salvage value?
If you keep the damaged car, the insurer usually takes its value off the settlement because you keep something of worth.
Does the tool include the lender's payoff fees?
No. Use the payoff figure from your lender as the loan balance if it is different from the balance on your statement.