Money

Your Chinese car worth less than you owe? Your options at trade-in

CMH says Chinese and Asian cars bought on finance four to five years ago have depreciated so sharply that many owners owe more than their trade-in value. Here's why, and the options the National Credit Act gives you.

By Reported Team

A white 2025 Haval Jolion SUV seen from the front
Throwawayacc222 via Wikimedia Commons (CC0)

Bought a Chinese or other Asian car on finance four or five years ago? Its trade-in value may now be lower than what you still owe the bank, according to motor retailer Combined Motor Holdings (CMH).

In its interim results for the six months to 31 August 2026, the JSE-listed group said these cars, sold at discount prices when they arrived, have lost value faster than owners expected. Many are holding on to their cars "until the trade-in values align with the residual amounts owed to banks", CMH said (BusinessTech).

Why are Chinese cars worth less at trade-in?

CMH said Chinese brands grew from 14.8% to 20% of national new-car sales in the period (BusinessTech). Cheap new cars pull buyers away from second-hand ones, and CMH also pointed to new-car prices that have fallen in recent years. Its used-vehicle sales dropped 10% while its new-vehicle sales rose 11.2%.

The picture is not the same for every model. TransUnion data cited by TimesLIVE found the Chery Tiggo 4 Pro lost 27.1% of its value over three years, against 20.5% for the Kia Sonet. The Haval Jolion lost 25.4%, compared with 21.7% for the Volkswagen T-Cross. Other analyses have found some Chinese models hold value as well as established rivals, the same report said.

Lightstone data shows used cars in general have been keeping less of their value since the second half of 2023, so owners of other brands can be caught too (TimesLIVE).

How does a balloon payment make it worse?

A balloon (or residual) is a lump sum left at the end of your finance term in exchange for lower monthly instalments. If your car's trade-in value is below that balloon, you have to cover the gap in cash, refinance the balloon where your bank allows it, or keep the car (TimesLIVE).

Longer terms add to the risk. Car finance in South Africa now runs up to 96 months, up from the old 72-month standard. Lightstone found 72-month deals were still 72% of vehicle finance in July 2025, with 96-month deals second at 10% (TimesLIVE).

What are your options if you owe more than the car is worth?

  • Ask your bank for a settlement figure. Under section 125 of the National Credit Act you may settle your agreement at any time. The amount is the unpaid principal plus interest and fees to date, and on large agreements an early termination charge may apply.
  • Get trade-in or sale quotes and compare them with that figure, so you know the size of the gap.
  • Keep the car longer and keep paying, which is what CMH says many owners are doing.
  • Voluntary surrender is allowed under section 127, but it does not wipe the debt. The bank sells the car and can demand any shortfall between the sale price and your settlement amount, plus interest, and may go to court if you don't pay within 10 business days.

If repayments are already a struggle, the National Credit Regulator lists registered debt counsellors and takes complaints about credit providers.

FAQ

Why is my Chinese car's trade-in value so low?

Motor retailer CMH says Chinese and Asian cars sold at discount prices four to five years ago have depreciated sharply, as cheap new cars reduce demand for used ones. Results vary by model.

What happens if my car is worth less than my balloon payment?

You can pay the difference in cash, refinance the balloon if your bank allows it, or keep the car until its value and the amount owed line up.

Can I settle my car finance early?

Yes. Section 125 of the National Credit Act lets you settle at any time. You pay the unpaid principal plus interest and fees to date, and an early termination charge may apply on large agreements.

If I hand my car back to the bank, is the debt cleared?

No. Under section 127 of the National Credit Act the bank sells the car and can demand any shortfall between the sale proceeds and your settlement value, plus interest.

Sources