retail vs market value

Retail vs Market Value – Car Insurance Guide


You’ve finally saved up enough for a deposit on a new car and you simply can’t wait to get your new ride off the showroom floor. Or perhaps you’re looking to upgrade to a bigger car for your growing family as your two-door no longer fits the bill.

When considering a change of vehicle – and protecting the replacement value – a key factor that should be your first consideration is car insurance.

Our latest blog explores the difference between your vehicle’s retail vs market value, along with the insurance implications of each option that you should be aware of.




Car insurance is a necessity in South Africa, especially when considering the grim reality that South African roads are some of the most dangerous in the world.

While we don’t want to be all doom and gloom, there are a few key facts you should be aware of when making a decision on the level of car insurance you’re purchasing.

According to the latest facts and figures from the South African Police Service, a carjacking occurs every 30 minutes in South Africa.

This means that every 30 minutes, someone will potentially make use of their car insurance policy to recuperate the cost of replacing their vehicle should it not be located and returned.

With the country scoring a mere 3.23 out of 10 compared to the rest of the world in terms of road safety, the chances of being involved in a motor vehicle accident are always relatively high, making the need for car insurance vitally important.


Did You Know: 60% to 70% of vehicles in South Africa are uninsured and more than 800,000 accidents occur annually.
Source: South Africa Short-Term Insurance Industry Report 2022.




When it comes to car insurance there are two general options in terms of cover. You can choose to insure your car for its retail value or you could opt for the market value.

Let’s look at both options so you can be fully informed when deciding which level of car insurance cover to choose.

Should you select to insure your car for the retail value, this is what you can expect:

    • The retail value of a car is the average price you would expect to pay for your vehicle at a dealership. This would be for a vehicle model that is similar to your current one.
    • Your car is covered for its average retail value, and this is what the settlement amount will be should your car be written off or stolen.
    • Retail value is usually higher than market value, and comes with higher monthly premiums.  Opting for retail value car insurance simplifies the process of replacing your car with one with the same equivalent value.


retail vs market value

Should you opt to insure your car for the market value, you should consider the following:

    • Market value car insurance can be confusing to most, but we’ll keep it simple – this is the price that you would get if you were to sell your car privately, based on variables such as:
      • The car’s model and year of manufacture
      • Its mileage, condition and service history
      • Potential supply and demand in the marketplace.


    • You can expect the market value of a car to be lower than the retail value.
    • Insuring your car at market value will give you lower monthly premiums, but be warned that the probable payout may not allow you to replace your vehicle like-for-like.


retail vs market value




Another consideration when buying a new car through a finance agreement is that you may be charged interest upfront.

In this case, whether your car is insured for retail or market value, the insurance payout will in many cases be insufficient to cover the full amount owed to the bank in the event of the car being written off in an accident.

Many insurers offer top-up cover which can make up the difference between the insured value of the car and the amount you owe on your loan.

The key when taking out any insurance cover, whether it be for your car insurance, your business insurance, or even cyber insurance, is to speak to an insurance broker who can help you make informed decisions about the type of insurance you require and which options are most suited to your budget.

Get in touch with our team of expert brokers to discuss your car insurance cover today.