When you take out car insurance with King Price, your car is insured for its retail value at the time of the incident, whether that’s a theft or an accident. But what does retail value actually mean, and why does it matter for your pocket? Let’s unpack it.
Key takeaways
- Retail value is the price your car would sell for at a dealership right now.
- King Price insures your car for its current retail value, not the price you paid for it.
- A retail value policy gives you the best possible payout if your car is written off or stolen.
- Car insurance is designed to indemnify you, meaning it returns you to your pre-incident financial position.
- King Price automatically recalculates your car's depreciating retail value and reduces your premium every month.
What is retail value?
Here’s an easy way to remember it: when you think “retail”, think “shopping”. Retail value is the price your car would sell for, or “retail” for, at a dealership. It’s the amount a buyer would pay to drive that specific make, model, year, and condition off the forecourt today.
- Retail value
- The price a vehicle would sell for at a franchised or used-car dealership at a specific point in time. It is typically higher than trade-in value and is used by insurers to calculate the payout on a total loss claim.
In short: retail value is the amount it would cost to replace your car if it were written off in an accident or stolen. It’s the most comprehensive valuation basis you can have on a car insurance policy.
Why is retail value the best cover for a total loss?
If your car is completely wrecked or has vanished off the face of the earth, you’ll get the best possible payout if you insured it for its retail value. That’s because retail value reflects what it would actually cost to walk into a dealership and replace your car with an equivalent one.
The two other common valuation bases, trade value and market value, typically produce lower payouts. Trade value is what a dealer would offer you as a part-exchange, which is always lower than what they’d sell the car for. Market value sits somewhere in between but can vary depending on the source used to calculate it.
| Valuation basis | What it represents | Typical payout on total loss |
|---|---|---|
| Retail value | Dealership selling price for your car today | Highest payout, closest to replacement cost |
| Market value | Average of retail and trade values | Mid-range payout |
| Trade value | What a dealer would pay you as a part-exchange | Lowest payout |
Retail value is the price a vehicle would sell for at a dealership and is used to calculate total loss payouts on short-term insurance policies in South Africa.
Why is your car insured for its value right now, not what you paid?
Car insurance is designed to indemnify you, not enrich you. Indemnification means returning you to the same financial position you were in before the incident, not a better one.
- Indemnity
- A principle of insurance that aims to restore the insured to the same financial position they were in immediately before a loss, without allowing them to profit from a claim.
Because cars depreciate the moment they leave the showroom, your car is worth less today than what you paid for it. Insuring it for the original purchase price would mean you’d receive more than your car is actually worth at the time of the claim, which would be enrichment, not indemnification. So your insurer uses the current retail value at the date of the incident.
Short-term insurance in South Africa operates on the principle of indemnity, which means the insured may not profit from a claim and is restored only to their pre-loss financial position.
How does car depreciation affect your premium?
Every month that passes, your car is worth a little less. Most insurers know this, but they don’t always pass the savings on to you. You could be paying a premium based on a value that no longer reflects what your car is actually worth.
Here’s where the King Price difference steps in. King Price automatically calculates your car’s depreciating retail value every month and adjusts your premium accordingly. As your car’s retail value drops, so does your premium. Your car is still insured for the best possible value, at a premium that reflects what it’s actually worth right now.
Why pay the same premium every month for a payout that decreases every month? King Price tracks your car's depreciating retail value and passes those savings on to you automatically.
How to get a King Price car insurance quote
How to get a King Price car insurance quote online
Get a quote for retail value car insurance in under three minutes.
Go to the King Price quote portal
Visit https://ssp.kingprice.co.za/?kpcid=20000588 to start your online quote.
Enter your vehicle details
Provide your car's make, model, year, and current retail value. King Price will calculate the correct insured value for you.
Choose your cover
Select the cover options that suit your needs. King Price insures your car for its retail value as standard.
Review and confirm
Check your monthly premium, review the policy terms, and confirm your cover. Your premium will decrease automatically every month as your car depreciates.
King Price automatically recalculates a vehicle's depreciating retail value monthly and reduces the client's premium accordingly.
King Price depreciating premium model
King Price is the only South African insurer that automatically reduces car insurance premiums every month in line with the vehicle's depreciating retail value, meaning clients pay less as their car is worth less.
The bottom line
Retail value is the most accurate and most generous valuation basis for car insurance in South Africa. It reflects what your car would actually sell for at a dealership today, which means it’s the closest thing to a true replacement cost if you ever need to claim. King Price insures your car for its current retail value and automatically lowers your premium every month as that value decreases. You get the best cover at a price that’s always fair.
Ready to save money the smart way? Get an online King Price car insurance quote and see your depreciating premium in action, or visit insurance.kingprice.co.za to find out more about our cover options.
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Frequently asked questions
Retail value is the price your car would sell for at a dealership on the day of the incident. It is the highest of the three common valuation bases (retail, market, and trade) and produces the best payout if your car is written off or stolen.
King Price automatically recalculates your car’s depreciating retail value every month and reduces your premium accordingly. As your car loses value over time, your premium drops to reflect the lower insured amount.
Retail value is what a dealer would charge a buyer for your car. Trade value is what a dealer would offer you as a part-exchange. Retail value is always higher, which is why it produces a better insurance payout.
Car insurance operates on the principle of indemnity, which means it restores you to your financial position before the loss, not a better one. Because your car depreciates after purchase, insuring it for the original price would mean you profit from a claim, which is not allowed under South African insurance law.
Yes, King Price currently insures vehicles for their retail value. This is the most comprehensive valuation basis available and ensures you receive the best possible payout in the event of a total loss.
Depreciation reduces your car’s retail value over time. Most insurers charge a fixed premium even as the payout value decreases. King Price adjusts your premium monthly to match your car’s current retail value, so you never overpay.
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