Legal Definitions - actual market value

Actual market value refers to the amount of money that something can command in an exchange. It is the price that a buyer is willing to pay and a seller is willing to accept in an arm's-length transaction. Actual market value is also known as fair market value.

For example, if a person wants to sell their car, the actual market value is the price that a buyer is willing to pay for it. If the seller and buyer agree on a price, then that is the actual market value of the car.

In insurance, actual market value is used to determine the replacement cost of an item minus normal depreciation. For example, if a person's car is stolen and they have insurance, the insurance company will determine the actual market value of the car at the time it was stolen and pay the policyholder that amount.