The difference between the retail and market value of a car

The difference between the retail and market value of a car


The retail value of a car (which is usually the higher value of the two) is the average price a car dealer would sell it for. In insurance terms, this means that if your car is covered for its retail value and it is written off in an accident or stolen without being recovered, the settlement amount will be based on the car’s retail value. If your car is insured for its retail value, it will be much easier to replace a damaged or stolen car with a similar make and model.  

The market value of a car is almost always lower than the retail value and takes into account a number of variables, including mileage, vehicle condition, service history and accident reports. If you were to sell your car privately, the market value would be the price that you could likely sell it for. Because this figure can vary from car to car, short-term insurers need to find a way to standardise the market value.  

With Santam’s standard comprehensive vehicle cover, you will be paid out the reasonable market value of your car, which means it will be easy to replace your vehicle if it is damaged or stolen. The reasonable market value uses the retail value as the base and takes into account the amount of kilometres on your car’s odometer, the condition of the car as well as any extra items added to the car. 

Guaranteed value insurance

How much will you get paid out if your car is written off or stolen? Guaranteed value insurance, guarantees what you’ll be paid out (Ts and Cs apply).  

Insure your car with Santam 

Santam is South Africa’s largest short-term insurer, insuring risks of over R4 trillion. We also offer the following cover and benefits:  

  • Comprehensive cover for your car; insurance good and proper now guarantees what you'll get paid out if your car is written off or stolen.
  • Third-party liability insurance and
  • Six free SOS services to our personal lines policyholders.  

Call us on 0860 444 444 or speak to your broker about the right insurance cover for your car today.

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