Why doesn't my car insurance go down as my car loses value?

It's one of the most common frustrations we hear from South African drivers, and it's completely understandable: your car is five years older, worth maybe half of what you paid, and yet your insurance premium is somehow higher than it was the day you drove it off the lot. How is that possible?

The short answer is that your car's market value is only one part of what your insurer is covering. The rest of the story is sitting in a panel beater's quote, a shipping container from Japan, and the rand's long downward slide.

What you're actually paying for

When you claim, your insurer doesn't just pay out your car's retail value and wave goodbye. Before it gets to that point — and most claims don't — they're paying to repair it. That means labour, parts, paint, and someone to manage the process. All of those costs move independently of what your car is worth on the used-car market. And in South Africa, they've been moving in one direction: up.

The labour problem

Panel beaters, spray painters, auto electricians and mechanics are skilled tradespeople. Their wages rise with inflation every year — often above CPI, because qualified technicians are in short supply and the work can't be outsourced. A repair that took four hours of labour in 2018 still takes four hours in 2026. The difference is that the hourly rate has roughly doubled. That's cost absorbed by your insurer on every structural claim, and it's reflected back in premiums across the board.

The rand and the parts problem

Here's where it gets particularly painful for South Africa. The majority of motor vehicle parts — including parts for locally assembled cars — are imported or contain imported components. They're priced in dollars, euros or yen. When the rand weakens against those currencies (and over the long run, it consistently has), the rand price of those parts goes up even if the dollar price hasn't moved at all.

In 2010, the rand traded at around R7.50 to the dollar. In mid-2026 it sits north of R18. That means a part that cost R1,500 in 2010 would cost over R3,600 today on exchange rates alone — before any price increases from the manufacturer. For newer vehicles with electronic components, advanced driver assistance systems and proprietary sensors, the parts are even more expensive and often available from only one supplier.

Third-party liability doesn't shrink with your car

Your comprehensive cover includes third-party liability — what the insurer pays if you damage someone else's car or property. The other person's car might be a brand-new double cab worth R650,000. Your own car's retail value has absolutely no bearing on that exposure. If anything, as new cars get more expensive, this component of your risk quietly grows.

So what does change as your car ages?

The one meaningful way your car's falling value does affect your cover is the write-off threshold. As the retail value drops, your car becomes cheaper to write off and replace rather than repair. Insurers will write a car off when repair costs approach or exceed its insured value. With an older, lower-value car, that threshold is closer — which can actually work against you, because you're more likely to receive a settlement cheque for a modest amount rather than a fully repaired car.

What can actually bring your premium down?

The good news is that your premium isn't fixed. There are legitimate levers — they just aren't the ones most people expect.

• Increase your excess. Choosing a higher voluntary excess directly lowers your premium because you're absorbing more of the small claims risk yourself.
• Add a tracking device. An approved tracker reduces theft risk, which insurers price into your premium.
• Build a clean claims record. Avoiding claims — even minor ones you could claim for — keeps your no-claims bonus intact and your premium lower.
• Review your cover type. If your car is older and lower in value, you may need comprehensive cover less than you think. Third-party, fire and theft might be appropriate — but get proper advice before dropping cover.
• Shop the market. Insurers price risk differently. What one insurer charges for your specific car, suburb and risk profile can differ substantially from another.

The honest bottom line

Your insurer isn't keeping your premium high out of spite. They're running the numbers on what it costs to repair your specific car, in your area, at today's labour rates and import prices — in rand. Those costs have outpaced your car's depreciation, and they're not going to stop. The best protection against overpaying is not accepting your renewal without question, and not assuming your current cover is the best available price for your situation.