Choosing cover
Retail vs market vs trade vs agreed value car insurance
By Sipho Dlamini · 7 min read · Updated 24 June 2026
The sum insured basis, retail, market, trade or agreed value, decides how much your insurer pays if your car is written off or stolen, and it directly affects your premium. Retail value generally gives the highest payout and premium, trade value the lowest, market value sits in between, and agreed value fixes a set figure upfront.
Choosing the wrong basis can leave you short, especially on a financed car where you might still owe the bank more than the payout. That is where shortfall and top-up cover come in.
Match your sum insured basis to what it would actually cost to replace your car and to what you owe, not just to the cheapest premium.
What sum insured basis means
When you insure a car, the policy values it on a chosen basis. If the car is written off or stolen, the payout is calculated using that basis, less your excess and any amount owing on certain top-up products.
The four common bases are retail, market, trade and agreed value. They differ in how generous the payout is and in how much premium you pay. A higher basis means a bigger payout but usually a higher premium.
Getting this right matters most at the worst moment, when your car is gone and you need enough to replace it or settle your finance.
Retail, market, trade and agreed value compared
The table below compares the value bases. Figures are illustrative; actual values come from recognised vehicle guides and your insurer's assessment at the time of the claim.
| Value basis | What it reflects (indicative) | Payout level | Premium effect |
|---|---|---|---|
| Retail value | Roughly what a dealer would sell the car for | Highest | Usually highest |
| Market value | Around the average of retail and trade | Middle | Middle |
| Trade value | Roughly what a dealer would pay for the car | Lowest | Usually lowest |
| Agreed value | A set figure agreed with the insurer upfront | Fixed at the agreed amount | Varies, often higher |
Retail tends to get you closest to replacing the car. Trade saves on premium but can leave a gap. Agreed value gives certainty, which can suit rare or modified vehicles.
How the payout actually differs
Imagine a car with a retail value of around R250,000 and a trade value of around R210,000. If it is written off, retail cover aims for the higher figure while trade cover aims for the lower one, before deducting your excess.
That difference can be tens of thousands of rand, which matters a great deal when you are trying to replace the car or settle a loan. Market value lands between the two, while agreed value pays the fixed amount you set up front, regardless of guide movements.
These numbers are illustrative only. Your real payout depends on the recognised value guides, your car's condition and mileage, and your policy terms at claim time.
Shortfall and top-up cover for financed cars
On a financed car, the amount you owe the bank can be more than the insured value, especially in the early years or with a long loan and a small deposit. If the car is written off, the insurance payout may not clear the finance, leaving you paying for a car you no longer have.
Shortfall cover, sometimes called credit shortfall or top-up cover, is designed to pay the difference between the insurance settlement and your outstanding finance balance, up to the policy limits.
If you have a financed car, check whether shortfall cover is included or available, and what it does and does not pay. Read the limits and exclusions, because some shortfall products cap the gap they will cover.
How to choose the right basis
If you need to be able to replace your car, retail value usually gets you closest, at a higher premium. If you mainly want to protect against the cost and could absorb a small gap, market value can be a reasonable middle ground.
Trade value is the cheapest premium but the smallest payout, so it is best only if you understand and accept the gap. Agreed value suits unusual, classic or modified cars where the guides may not reflect true worth.
Whatever you choose, make sure the sum insured is realistic. Under-insuring to save premium can trigger an averaging reduction on your payout, leaving you worse off.
Disputes over value and shortfall
Disagreements often centre on the value used at claim time, since recognised guides and assessments can differ from what you expected. Ask your insurer to show how the payout was calculated and which guide and basis were used.
If you believe the value or shortfall was handled unfairly, raise it with the insurer's complaints process first and request the reasoning in writing.
If you remain unhappy, you can take the dispute free of charge to the National Financial Ombud, which absorbed the former OSTI. This site is an independent information resource and not a broker; always confirm your insurer is licensed on the FSCA register.
Frequently asked questions
What is the difference between retail value and market value car insurance?
Retail value reflects roughly what a dealer would sell the car for and usually pays out the most, at a higher premium. Market value sits between retail and trade. So retail cover generally gives a larger payout than market value if your car is written off or stolen.
What is agreed value car insurance?
Agreed value fixes a set payout figure with the insurer when you take out the policy, rather than relying on a guide at claim time. It suits rare, classic or modified cars and gives certainty about the payout, though the premium can be higher.
Which value basis gives the lowest premium?
Trade value usually gives the lowest premium because it reflects roughly what a dealer would pay for the car, the smallest of the bases. The trade-off is the smallest payout, which can leave a gap if you need to replace the car or settle finance.
What is shortfall or top-up cover?
Shortfall cover, also called credit shortfall or top-up cover, pays the difference between your insurance settlement and the amount you still owe on finance, up to the policy limits. It protects financed-car owners from owing money on a written-off car.
Do I need shortfall cover?
It is worth considering if your car is financed, especially with a long loan, small deposit or in the early years, when you may owe more than the insured value. Check whether it is included or available, and read the limits and exclusions carefully.
Can under-insuring my car reduce my payout?
Yes. If your sum insured is set too low for the car's value, an averaging clause can reduce your payout proportionally. Choosing a realistic sum insured basis and value helps avoid being caught short when you claim.
What if I disagree with the value the insurer used?
Ask the insurer to show how the payout was calculated and which value guide and basis were used. If you are still unhappy, you can complain free of charge to the National Financial Ombud, which now handles former OSTI short-term insurance disputes.
