What you need to know when buying a damaged vehicle
Damaged repairable vehicles, usually called ‘salvage’ in the trade & often known as ‘write-offs’ to the public, are widely available. Damaged vehicles can be purchased direct from the insurer, from an insurer-contracted salvage agent, or from retail outlets like E-bay. Many MVDA members have direct links with motor insurers.
Buying salvage can be a great way to save money. But it’s often not as easy as it seems & to make the most of it you need to understand exactly what you’re doing; in particular, what to avoid.
First off, it’s important to understand what ‘salvage’ is & where it comes from. Motor salvage is when a vehicle has been subject to an insurance claim, usually due to accident damage or theft, but the cost of repairing it is too high to make repair worthwhile for the insurer. This doesn’t necessarily mean that the vehicle has been too badly damaged to repair, but the overall cost to the insurer (including things like car hire, delays in obtaining or the cost of new genuine parts, labour & paint charges etc.) is too high. With the price of things nowadays, it’s often surprisingly easy to ‘write off’ a vehicle. But insurers recognise that many of these vehicles can be repaired using ‘green’ parts and cheaper labour. So they either sell off these vehicles ‘in bulk’ to salvage agents, who in turn offer them out to the market, or increasingly insurers are selling the salvage themselves using the salvage agents auction site (for which they simply pay a fee to the salvage agent).
But be careful. Not all salvage is the same. In the past, criminal activities involving salvage led insurers to establish a Code of Practice to help identify the various types, or categories, of salvage. Unfortunately, this COP is only voluntary, and it is widely suspected that compliance with the COP isn’t what it should be. But even so, it still presents a useful tool. You can find a link to the ABI COP at the bottom of this page
Insurers divide salvage into 4 categories, A-D, depending upon the severity of the damage to the vehicle. Category A & B salvage is so badly damaged that the insurer has said that the vehicles must be destroyed. You should never buy this type of salvage, even though it can sometimes be seen offered for sale. Only category C or D vehicles can be repaired. Category C vehicles are the most extensively damaged. Because this category was identified as being most at risk of vehicle crime the Vehicle Identity Check scheme was introduced in 2003 and you cannot get a V5 registration document or tax the vehicle until the vehicle has undergone a VIC. When a replacement V5 registration document is issued by DVLA there will be a statement on the front highlighting that the vehicle has previously been substantially damaged and repaired. In most cases, this reduces the value of the vehicle. However, the VIC does not certify the ‘quality’ of repair & cannot be relied upon at the point of purchase as proof that the vehicle is what it should be. Always check yourself. Some insurers will only insure category C vehicles if they have undergone an engineering inspection after repair. Category D vehicles are the least damaged type of salvage and generally the most valuable.
Download a copy of the CODE OF PRACTICE ON DISPOSAL OF MOTOR SALVAGE here