Car Trade Value vs Retail Value in South Africa Explained
A car's trade value is roughly what a dealer will pay to buy it from you. Its retail value is roughly what that dealer will ask when selling it to the next buyer. Retail is always the higher number, and the gap between the two is where most of the confusion (and most of the haggling) happens.
If you know both figures before you talk to anyone, you can tell a fair offer from a low one, and a fair asking price from an inflated one. The sections below cover what each value means, why the gap exists, and how to use it whether you are selling, trading in or buying.
What is a car's trade value?
Trade value is the price a dealer is prepared to pay for your car when buying it as stock. It is the figure behind a trade-in offer, and it is the number a dealer works from when they buy a car outright from a private seller.
It is lower than retail because the dealer is taking on work and risk. They still have to prepare the car, hold it until it sells, and cover the cost of finding a buyer. Trade value is the car's worth to someone who has to resell it.
You will also see it described as trade-in value, trade price or the "book" trade figure. If you are searching for car trade in value South Africa, this is the number you want.
What is a car's retail value?
Retail value is the price a car would typically be advertised for by a dealer: cleaned, prepared, and ready to drive away. It is the upper end of the market for that make, model, year and mileage.
Retail value is the figure most people mean when they search for a car retail value calculator or vehicle market value. It is a useful ceiling when you are buying, because a dealer's asking price usually sits at or around it, and it is where a negotiation starts rather than ends.
Trade value vs retail value at a glance
| Trade value | Retail value | |
|---|---|---|
| Who it describes | What a dealer pays to buy the car | What a dealer asks to sell the car |
| Where you meet it | Trade-in offers, outright sales to a dealer, auction bidding | Dealer showroom and online listings |
| Car's condition assumed | As it is, before any preparation | Prepared and ready for sale |
| Useful to a seller as | The floor: the least you should accept from a dealer | The ceiling: the most a buyer is likely to pay |
| Useful to a buyer as | A sense of what the dealer paid | A check on whether an asking price is fair |
A private sale usually lands somewhere between the two. You earn more than a dealer would pay you, and the buyer pays less than they would at a dealership.
Why do dealers buy at trade and sell at retail?
It is easy to read the gap as pure dealer profit. Part of it is, but not all. A dealer has to cover several things between buying your car and selling it:
- Preparation. Valeting, minor repairs, tyres, a service or a roadworthy, depending on the car.
- Holding time. A car on the floor ties up money and takes up space until it sells.
- Risk. Hidden faults, a car that sits unsold, or a market that moves while it waits.
- Selling costs. Advertising, staff and the overheads of running a dealership.
- Margin. What is left is the dealer's profit.
That is why a dealer cannot pay retail for your car and still stay in business. It is also why you can expect to be paid less in exchange for a fast, simple sale.
A worked example (illustrative figures only)
These numbers are made up to show the logic. They are not real values for any car.
- Retail value: R215 000
- Trade value: R180 000
- Gap: R35 000
If a dealer offers you R165 000 on a car with a trade value of R180 000, the offer is R15 000 under the trade figure, and you have a reason to question it. If you advertise the same car privately at R250 000, you are R35 000 over retail, and you will probably wait a long time for a buyer. A realistic private asking price sits between R180 000 and R215 000, nearer the top if the car is in excellent condition with a full service history.
How to use trade and retail value when selling your car
- Look up both values first. Do it before you speak to a dealer or write an advert.
- Decide what matters more: speed or price. A dealer sale is fast and close to trade value. A private sale takes longer and can get you closer to retail.
- Get more than one dealer offer. Compare each against the trade value, not against your hopes.
- Price a private advert between the two. Start nearer retail if the car is clean and well documented, and be ready to come down toward the middle.
- Adjust for your car's actual condition. Mileage, damage, tyres, service history and the number of keys all move the figure. Be honest with yourself about where your car sits.
For more on presentation, paperwork and timing, read how to get the best price when selling your vehicle.
How to use both values when trading in
A trade-in is a sale to the dealer, so the offer should be close to the trade value. The mistake many people make is looking only at the trade-in figure and ignoring the price of the car they are buying.
- Treat the two as separate negotiations: first the price of the car you are buying, then the value of your old one.
- Check the dealer's price for the new car against its retail value.
- Compare the trade-in offer against your car's trade value, and against what a private sale might realistically earn after your time and effort.
Sometimes a lower trade-in is worth it for the convenience. Knowing the numbers lets you make that choice on purpose.
How to use both values when buying a used car
As a buyer, retail value is your reference point. If a dealer's asking price is well above retail for that make, model, year and mileage, ask why. If a private seller's price is far below retail, ask why too, and check the car carefully before you get excited.
This is also the thinking behind searches such as cars for sale under market value. A price under market can be a real opportunity, or it can mean a problem you cannot see yet. Two checks help:
- Check the car's history. An accident report lists the insurance claims registered against a VIN, so you can see what the seller may not mention. It costs R110 a report.
- Work out your total cost, not just the price. Repairs, fees and VAT can wipe out a bargain.
Buying at auction: trade value is the benchmark
Buyers at bank-repossessed and auction-house sales are in effect buying at or near trade prices, then selling at retail, the same way a dealer does. Trade value tells you what a car is worth on the way in, and retail value tells you what it could fetch on the way out. Car Auction Scout reads every bank-repossessed and auction-house car from 8 auction houses every day and ranks them by estimated profit, with trade value, repairs, fees and VAT worked out. It costs R300 a month.
How to check a car's trade and retail value in South Africa
The most reliable way is to look up the car's South African book values rather than guess from a few adverts. Adverts show asking prices, not what cars actually trade for.
The AssetScout app (formerly VehicleDB) gives you a car's South African trade and retail book value. You can search by VIN or by make and model. If no value is found, the search is refunded.
Treat any value as a guide. Two cars of the same make and year can differ by thousands of rand depending on mileage, condition, service history and accident history.
Frequently asked questions
Is trade-in value always lower than retail value?
Yes. Trade value is what a dealer pays and retail value is what they sell for, so retail is higher by the amount that covers preparation, holding costs, risk and the dealer's margin. The size of the gap varies from car to car.
What is the difference between book value and trade or retail value?
"Book value" is the general name for a published value guide. Those guides normally show both a trade and a retail figure, so when someone quotes "book value" it is worth asking which of the two they mean.
Should I ask for retail value when selling to a dealer?
No. A dealer will not pay retail, because they still have to resell the car. Aim for a fair offer near the trade value, and sell privately if you want a price closer to retail.
Is there a car value calculator for South Africa?
Yes. You can look up a car's trade and retail book value by VIN or by make and model using AssetScout's car value search.
What price should I pay for a bank-repossessed car?
Work backwards from the car's retail value: subtract repairs, fees and VAT, and decide how much profit or saving you need. The trade value shows what the car is worth to a dealer. Always check the VIN history before you bid.
Next step
Before your next offer, asking price or bid, look up the car's trade and retail values. You can check a car's value on AssetScout and go into the conversation knowing both numbers.