One of the biggest costs of car ownership in South Africa isn’t fuel or insurance — it’s depreciation. Understanding how quickly your vehicle loses value helps you make smarter purchasing decisions.
What Is Vehicle Depreciation?
Depreciation is the decline in your vehicle’s market value over time. New cars typically lose 15-20% of their value in the first year and around 10-15% per year thereafter.
South African Market Factors
South African vehicle depreciation is influenced by several factors including the rand exchange rate (which affects replacement costs), fuel price volatility, and the popularity of specific brands. Japanese and German brands tend to hold their value better in the South African market.
SARS Depreciation Allowances
For tax purposes, SARS allows depreciation on business vehicles. Passenger vehicles are depreciated over 5 years at 20% per year, subject to a cost cap. The annual write-off limit for passenger vehicles is R325,000 (2025/2026 tax year).
Tips to Minimise Depreciation
Choose popular brands and colours, maintain full service history, keep mileage reasonable, and consider buying slightly used vehicles that have already absorbed the initial depreciation hit.
Calculate Your Vehicle’s Depreciation
Use our Depreciation Calculator to estimate how much your vehicle will be worth in the future.