Market value

Market value reflects what a private buyer would realistically pay for your car — below the dealer's retail asking price but above the trade-in figure a dealer would offer. It is the basis many South African policies default to unless you ask for retail, which is why it is worth checking your schedule rather than assuming.

The practical consequence shows up only at a total loss. A market-value settlement is typically several thousand to tens of thousands of rand less than retail on the same vehicle, so the saving on the monthly premium is balanced against a smaller payout if the car is written off or stolen.

Market value is a reasonable middle ground for a paid-up car you could top up from savings if needed. On a financed car, weigh it carefully — a market-value payout that falls short of the finance balance is exactly the gap credit shortfall cover exists to close.