Car Write-Off Question

[creditcruncha]

My sister's old car was written off after being rear-ended. It still runs fine and the damage is only to the bonnet and bumpers but bodyshops would charge twice the car's value to repair so insurance wrote it off but let her keep it as she can't afford another car (but a friend might be able to repair it as a favour for free).

 

Two questions:

 

a) Insurance told her that her policy continues and that she can repair the car by re-MOT'ing it and then taking it to a VOSA test centre for identifiation confirmation. Is this normal and correct that the insurance premiums don't change while she has this done?

 

b) Insurance said she effectively 'bought the car back' and owns it. Can she sell it as is, without repairing it, while it's written off?

[gyzmo]

1. Perfectly normal and legit.

2. You can depending on the category. If it's purely costwise (i.e, not on gounds of danger) then you can do but you must declare this to a buyer.

[creditcruncha]

How does one find out what the write-off category is, other than through the insurance company? Can VOSA or anyone else confirm this?

[patdavies]

Insurance write offs are notified to DVLA.

 

They will reflect the write of category on a future V5

[banker_rhymes_with]

Hello Creditcruncha!

 

How does one find out what the write-off category is, other than through the insurance company? Can VOSA or anyone else confirm this?

What I am about to say is probably all current, but by the time you read this, things may've changed so always check! These issues are always changing!

 

Cars that are covered by Insurance that have had a bump and are subject to a Claim and Payout, i.e. where the Insurance Company declines to repair although the Car is regarded as being capable of economic repair, are classed by the Insurance Company in two ways (Cars insured 3rd Party and Damaged without a Claim are not recorded):

 

Category C

 

• Cost of repairs Exceed Pre-Accident Value.
  
• V5 is voided by the Insurance Company with DVLA.
  
• MOT is also (usually) voided by the Insurance Company with VOSA.
  
• Vehicle must (usually) attend a VOSA Testing Station for a Vehicle Identity Check (VIC) before a replacement V5 can be issued and the Car put back on the road.
  
• Vehicle must be substantially repaired before VIC.
  
• Vehicle under 3 Years Old can be driven to the VIC un-Taxed provided it is Insured and Roadworthy.
  
• Vehicle over 3 Years Old can be driven to the VIC un-Taxed provided it is Insured and Roadworthy and has passed an MOT since the accident and repair.
  
• VIC Check is ONLY to check the Car's identity, it is not an MOT. Provided the Car is the same Car and Vehicle Identity Number (VIN) stamps all match, and any chassis check digits are a match to the VIN, then the Car will pass the VIC.
  
• The VIC Fee includes the fee for a new V5 Registration Document, fastest is to visit a DVLA Local Office after the VIC and submit Form V62 for the V5, and V10 for the Road Tax.
  
• The New V5 will be marked to say the vehicle has been substantially repaired and/or accident damaged. It will also state the date that the VIC was passed.
  
• The C rating will be logged on MIAFTR* for the remaining life of the Car. This will appear on HPI Checks.
  
• Insurance should not be affected, but if Car is subject to another Claim, be aware you may get less than Market Value for it unless you can prove value and quality of repairs.
  
• Market Value once repaired will be less than that of a similar Car of the same Age and Mileage. Probably 55%, but that can increase to 95% as Cars get older and people don't care what happened to it years go.
  

Category D

• Cost of Repairs do not Exceed Pre-Accident Value.
  
• V5 and MOT (if available), can be given to new owner.
  
• Car will need repairs, then MOT/Tax as usual.
  
• V5 will not be marked. DVLA don't care about Ds!
  
• The D rating, however, will be logged on MIAFTR* for the remaining life of the Car. This will appear on HPI Checks.
  
• Insurance should not be affected, but if Car is subject to another Claim, be aware you may get less than Market Value for it unless you can prove value and quality of repairs.
  
• Market Value once repaired will be less than that of a similar Car of the same Age and Mileage. Probably 75%, but that can increase to 100% as Cars get older and people don't care what happened to it years go.
  

*MIAFTR = the Insurance Database that logs all such things (Motor Insurance Anti-Fraud and Theft Register or words to that effect). HPI plugs in to that, and MIAFTR also gets Data from DVLA and VOSA...and guess who also dips into that Data? Hint, begins with C, has an R and an A in the name...CRAs!

 

VOSA won't carry out a VIC unless a Car has been classed as a C, so one way to tell is to contact VOSA and ask them if the car needs an inspection. If they say yes, then it's a C. Do allow for the fact there can be a delay, so whilst VOSA may say no one day, call them again a week later, and they may say yes, so it's just a quick way to find out.

 

You can also run an HPI check, which will tell you, but that too has delays, depending on when the Car was damaged. Some Insurance Companies never get around to updating MIAFTR.

 

To be honest, it is all a bit of a mess, as perfectly good Cars are classed as Category C, and some badly damaged Cars are classed as Category D.

 

It is all about Pre-Accident Value. A 150k Aston Martin can be wrapped around a tree but, if the cost of repairs are less than the Pre-Accident Value, then it's a D not a C.

 

Likewise, a perfectly nice older 2k Car with a scrape down the doors and a broken headlight can be a C...just because new Doors, New Headlight and a Spray Job, plus Labour, all at Main Dealer Rates can exceed 2k...but you can pop to a Car Breaker and buy the used parts for maybe £200 all in, and maybe even in the same colour!

 

Do note that no matter how badly damaged, if an Insurance Company pays for the repairs, then the Car has no history whatsoever, it is not recorded. Think about that for a while...then think how many Bodyshops there are out there, and you may begin to see how many wholly unrecorded Cars that have been damaged there are out there.

 

The Insurance Industry, like the Debt Industry, operates the usual dual standards to suit itself, not to mention looking after all the approved Bodyshops and Insurance Surveyors who earn a crust from that other great big [problem] out there called Insurance.

 

The line between Debt Industry and Insurance Industry is pretty blurred in many places. Equifax and HPI were linked, and we all know what Equifax does! I think HPI was sold to Norwich Union, but the Data links are still there, if you get my drift...Consumer Data ends up in the same place!

 

Finally, think of a Category as being a bit like a Bad Credit Rating...not all Bad Ratings are bad, if you see what I mean. The really bad Cars are classed as Category A and Category B, and they are not allowed back on the road, and are also classed as Controlled Waste. Both must be crushed, but a B can be dismantled first and then the shell crushed, whereas an A has to be crushed without being dismantled (usually burnt out wrecks, Cars covered in blood, or sewage etc, where dismantling would pose a health hazard)

 

So, there are many good cars out there with C or D ratings but, many bad too. However, there are also many Insurance Repaired Cars too that can be good and bad, but with no history. Nothing appears on MIAFTR* so nothing appears on an HPI Check...funny that.

 

In summary, if the Car is an easy repair, keep it, repair it. Get an MOT, book a VIC, drive it to VOSA, then visit DVLA with your Insurance and VIC Test Certificate and you can Tax it there and then, the V5 will follow a couple of weeks later. Simples.

 

 

Cheers,

BRW

Edited April 25, 2009 by banker_rhymes_with
Typo...why am I not in bed?

[creditcruncha]

Many thanks! That is enourmously helpful.

But ... in a class C situation, if the V5 is voided by the insurance how can one sell the car to soemone else who would want to repair it for themselves? What document to transfer ownerhsip woudl you use?

[banker_rhymes_with]

Hello CC!

 

But ... in a class C situation, if the V5 is voided by the insurance how can one sell the car to someone else who would want to repair it for themselves? What document to transfer ownership would you use?

No need to worry, you just sell the car (assuming there is no finance outstanding on it and you own it outright and can sell it).

 

There is no Document as such.

 

The V5C Registration Document is just the paper confirmation of the DVLA Registered Keeper. It never actually relates to who owns the Vehicle. DVLA is tasked with keeping track of Vehicle use and liability for things like Road Tax and fines if that car is flagged up for things like speeding offences etc.

 

This is why I said Category C is an enormous grey area.

 

Once declared C, the Vehicle falls off the grid in terms of the usual Taxing and SORN issues, because it cannot be either Taxed or SORNed until it has been inspected by VOSA and has passed a VIC.

 

The whole issue was never thought through very well...no surprises there when it comes to Government and DVLA. The intention was to stop damaged cars being ringed, i.e. a matching car stolen to order, and given the damaged car's identity. But all this has done is add a huge layer of Red Tape for the majority of honest people. The crooks are still doing what they do just in different ways.

 

I'd say it's just another form of indirect/stealth Taxation.

 

You can sell the car to anyone you like, all you cannot do is give them a V5C with the sale. You need to tell any buyer that the car is damaged and recorded as Category C on MIAFTR (see above for what that means) and needs a VIC. Tell them once they buy, it's all their problem in terms of Repairs and MOT/VIC/Registration and Tax...make sure you get their true identity, and insist upon some proof of that, such as Driving Licence, Utility Bill, or Payment that can be audited (Cheque/Bank Transfer).

 

The last thing you want is to sell the car to some unidentified crook who pays you cash and then uses it for a Ram Raid the following week!

 

There is a rule that says Salvage Traders must get the buyer's ID, but that rule was intended for Registered Salvage Dealers, it was never intended for Private Sellers so almost certainly has zero effect for a Private Seller...that's yet another example of the grey area I mentioned.

 

Remember that the Car cannot be parked on a road, and cannot be driven unless insured and going to/from an MOT or a VIC.

 

Traders can drive them around provided the car is repaired and has an MOT (if over 3 years old, if under 3 years old it doesn't even need an MOT), i.e. using Trade Plates to cover the lack of Road Tax. But the car has to be legally roadworthy even for a Trader to move it under its own steam.

 

In summary, you can easily fix this and get it back on the road yourself (Repair, MOT, VIC then Register and Tax it). If the repairs are simple, the Red Tape is not as bad as it looks...it's effectively like going for two MOTs (1x MOT and 1x VIC) and then a trip to get Registered/Taxed at the same time. So, three trips out at most, and two if you get the VIC and Register/Tax same trip.

 

Or, you can sell it needing repair, provided the buyer gives you their ID (for your own protection rather than that being a legal necessity), and the buyer takes on the responsibility for moving it away from your home.

 

If the buyer wants to drive it away, that is their problem. It is up to you if you want to let them, i.e. it's not your problem what they do once you sell it but, to be sensible, I'd make sure the buyer can take it away on, say, a trailer or Recovery Truck.

 

One thing I would do is make sure you make out a simple Sales Sheet, two copies, and get the buyer to complete and sign that, and confirm date and payment etc. Then, if there's a problem, you have the evidence that the car was sold and to whom. I'd also take a picture of their face, just in case.

 

Finally, once on the Road, the car is the same as any other, but has a marked V5C and it will also flag C on MIAFTR, both of which will reduce the value. Although the effect fades the longer the car is on the road. Most buyers of older cars just want something well maintained and reliable. The C issue is just Insurance Company/Government nonsense at the end of the day, i.e. when you bear in mind the thousands of ex-damaged vehicles on the road that have been repaired by Insurance Companies and that have not been recorded in any way.

 

Traders and so on will jump about and say that is not so, cars that are C/D are a nightmare but, they are the first to sell a previously damaged car if they think they can get away with it! I fully accept and agree that standards are all over the place with C/Ds but the point I'm making is it's not so rosy for Cars repaired by Insurance Companies either...I've seen too many that have been poorly repaired that have zero official history to reveal this.

 

Remember that 95% of all cars on the road now will be in a crusher within 15-20 years, so the key issue is keeping your own costs of motoring down. A lot of the C/D hype is Traders wanting to inflate their own Stock's value when faced with heavily discounted competition in the form of C/D vehicles. The same Traders are happy to clock a Car's mileage or sell one they know to have been damaged/repaired and not declare it if they know it is not recorded C/D!

 

Insurance Companies are also declaring many more cars C/D because it saves them money. They know they can sell them for a good price, so they promote the C/D sales on the one hand, and yet pretend to poo-poo them with the other. Depends what they want at the time!

 

I hope this helps.

 

Cheers,

BRW