Retail value represents the higher price a traditional car dealership charges when selling a vehicle off the lot, which includes dealer profit margins, reconditioning costs, and warranty overhead. In contrast, market value (or actual cash value) is the realistic figure reflecting what a private buyer would pay in an open market and is the standard metric insurance companies use to settle claims. Because retail value includes dealership markups, insurance payouts based on market value are typically lower than sticker prices.
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