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Retail Value
Retail value is what you would pay a reputable dealer to buy the same used vehicle, and it is typically the highest of the four bases. Insurers read it from the recognised valuation guides such as TransUnion and AutoTrader.
Because it pays the most, retail-value cover carries the highest premium, and it is the natural choice for a newer car or one still under finance, where you need enough to replace the vehicle or settle the loan. The bigger payout is what you are paying the extra premium to secure.
Market Value
Market value sits between retail and trade — broadly the average of the two — and is the most common default on South African motor policies. It reflects a realistic everyday selling price rather than the top dealer figure.
For a car a few years old, market value is usually a sensible balance of premium and payout. It is enough to put you in a like-for-like replacement in most cases, without paying the retail premium for the very top of the valuation range.
Trade Value
Trade value is what a dealer would pay you for the car on a trade-in, and it is typically the lowest of the four. Insuring on trade value gives the cheapest premium but the smallest payout, so the saving each month is bought at the cost of the cheque at claim time.
Trade-value cover suits an older or high-mileage vehicle where retail value is unrealistic and the owner is comfortable carrying more of the replacement cost themselves. On a newer or financed car it usually leaves too large a gap.
Agreed Value
Agreed value is a fixed figure you and the insurer settle at inception, and it does not depreciate over the policy term — the amount written into the schedule is the amount that pays out. It removes the argument about value entirely at claim stage.
It is most common on classics, collectibles, and high-value or modified vehicles whose worth the standard guides do not capture. The premium is usually the highest, but the certainty is the point: you know in advance exactly what a total loss will pay.
How the Bases Compare
Ranked from highest payout to lowest, the order is generally agreed (where set high), then retail, then market, then trade — with the premium broadly following the same order. The right basis is the one whose payout matches what you would actually need to recover from a write-off.
The gap between them is not trivial. On a popular hatchback the spread from retail to trade can run to R20,000-R40,000, and on a higher-value car considerably more, which is why the value basis deserves a deliberate decision rather than accepting the default.
Which Value Basis Should You Choose?
Match the basis to your exposure. A newer or financed car argues for retail value, so the payout can replace the vehicle or clear the bank; a mid-life car is usually well served by market value; an older, paid-off runabout can justify trade value to keep the premium low; and an unusual or modified vehicle calls for agreed value.
Whatever the basis, a financed car should pair it with credit shortfall cover, because even retail value can fall short of the loan balance in the first few years. The value basis decides the payout; shortfall cover closes any remaining gap to the bank.
Keeping the Value Current
Insurers re-rate the value at each renewal using the latest guides, so a market or retail figure tracks depreciation automatically year by year. You can also ask for a mid-term update if used-car prices move sharply, as they did during recent supply shortages.
An agreed value is the exception — it stays fixed for the term, which is its strength, but it should be reviewed at renewal so it does not drift away from the car's real worth over several years. A quick check of the basis and the figure at renewal keeps the cover honest.