Own a 5-year-old Chinese car? Your trade-in may not cover your loan
CMH says Chinese and Asian cars bought at discount four to five years ago have lost value so fast that trade-in offers often fall short of what owners still owe the bank.
Owners who bought Chinese and other Asian cars at discount prices four to five years ago are finding their trade-in offers don't cover what they still owe the bank, says motor retailer Combined Motor Holdings (CMH). Many are now keeping their cars longer instead of upgrading.
CMH, which runs dealerships across South Africa, flagged the problem in its interim results for the six months to 31 August 2026, published on the JSE on 21 October.
What did CMH actually say?
CMH said those cars are now at the age when owners would normally trade them in, but "the sharp depreciation in value of these vehicles has surprised owners". According to the group, owners are being "forced" to hold on until trade-in values catch up with the residual amounts owed to banks (CMH results).
In practice, that means the car is worth less than the settlement on the finance. To trade it in now, the owner has to pay the difference in cash or roll it into a new loan.
How big have Chinese brands become?
Chinese brands' share of national new car sales rose from 14.8% to 20% over the period, CMH said. Total new vehicle sales were up 12.5% (CMH results).
CMH warned that with new brands and models arriving every quarter, "it is impossible to identify all the potential long-term winners". It also said many importers are overstocked, which keeps pressure on new car prices and, in turn, on what used cars fetch.
Is the used car market feeling it?
Yes. CMH's own used car unit sales fell 10% and its used car gross margin dropped 4.7%. The group said buyers are moving to cut-price new cars instead of used ones (CMH results).
Do all Chinese cars lose value fast?
No. The picture differs by model. Cars.co.za market data on 2022 models found the Chery Tiggo 4 Pro and Haval Jolion lost under 30% of their value over three years, better than some established rivals. The Chery Tiggo 7 lost about 25% and the Haval H6 just under 30%.
For comparison, the Toyota Corolla Cross lost about 15% over the same period (Cars.co.za). AutoTrader/17403) puts the leading Chinese compact crossovers at roughly 70% to 75% of their original price after three years.
Newer brands with a short track record in South Africa, and cars bought on long finance terms with big balloon payments, are the most exposed, because the loan shrinks more slowly than the car's value.
What can you check if you own one?
- Ask your bank for a settlement figure on your vehicle finance, including any balloon (residual) payment.
- Get more than one trade-in offer and compare it with that settlement figure.
- If the offer is lower than what you owe, the gap is what you'd need to cover in cash or finance to trade in now.
FAQ
Why are Chinese car owners struggling to trade in?
Motor retailer CMH says cars bought at discount prices four to five years ago have lost value faster than owners expected, so trade-in offers often don't cover the amount still owed to the bank.
What share of new car sales do Chinese brands have in South Africa?
CMH says their share of national sales rose from 14.8% to 20% in the six months to 31 August 2026.
Do all Chinese cars depreciate quickly?
No. Cars.co.za data shows the Chery Tiggo 4 Pro and Haval Jolion lost under 30% of their value over three years, while the Toyota Corolla Cross lost about 15%.
What happens if my car is worth less than my loan?
To trade it in, you need to pay the difference between the trade-in offer and the bank's settlement figure, in cash or through new finance.
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