Salvage Wire

Salvage Wire
Helping Automotive recyclers become leaders in their industry

Friday 23 April 2010

Australian ban on repairing motor salvage

The New South Wales Government intend to introduce legislation that bans all insurance write offs from being re-registered, effectively condemning all motor salvage in NSW to the crusher.
Mr David Campbell, Minister for Transport and Roads has said that the legislation will prevent vehicles being ‘re-birthed’ with stolen parts.
This has major implications for much of the industry, and shows that Government initiatives are being implemented without full investigation of the consequences.

Currently many insurers will use the salvage value of a vehicle to ‘construct’ a total loss scenario for high value vehicles with heavy damage. As an example, a $40,000 Mercedes with $30,000 worth of damage would probably achieve $12,000 return as repairable salvage, but would struggle to get $4,000 under the proposed NSW laws, so the customer and insurer are faced with 3 options.
Repair the car – would you want your $40k vehicle repaired?
The insurers pay the market value and sell the vehicle as damaged repairable, with no mention of total loss or write off – thus hiding the history of the vehicle or:
Pay the owner the repair cost on a cash in lieu basis and then let the owner decide on the next course of action, many of whom will sell the vehicle as damaged, but with all the vehicle documentation. Fuelling the possibility of fraudulent activity, including vehicle cloning that the legislation is trying to stop.
Message to NSW, look at the current Code of Practice in force in the United Kingdom, it has been in force since the early 1990’s, and it successfully controls the decision on vehicle repair or scrap, and also specifies information that must be made available through data check services, and the release of vehicle documentation to the purchasers of motor salvage. These controls give the insurers the opportunity to sell salvage; to construct total loss cases for the benefit of their customers; gives legitimate salvage companies the chance to continue buying and repairing vehicles; makes life much more difficult for those that are operating outside of the law; and improves the professionalism of the whole motor salvage industry.

Thursday 1 April 2010

How clean is the operation?

Over many years of working in the salvage industry I have seen a discernable increase in the environmental standards of the sites that I visit.

I visited a yard last week in the UK that took me back 6-8 years, the storage area was ankle deep in mud, vehicles were being stripped in the open, and the working area was covered in oil, mud and other vehicle fluids. Vehicles stored had obviously not been de-polluted, still had wheels and tyres on and fluids were visibly leaking.

This yard is licensed by the Environment Agency, and is also registered with their local council, yet they still continue to operate whilst appearing to ignore many of the standards set by End of life Vehicle Regulations.

The UK salvage industry needs to work very closely with the various government departments and agencies to raise professional standards and increase the public perception of the industry. Yards like the one detailed above bring the industry into disrepute, and must be encouraged to improve within a defined timescale otherwise their licences need to be revoked.

I am very fortunate; my role takes me to many yards all over the world, with some of the best being in Germany and Holland. Most of these have got there through rigorous enforcement and in some cases grants from local and national government. They set the standard that the salvage industry worldwide needs to aim for, and this includes how they work with their environment agencies locally and nationally.

We need to get over the ‘them and us’ attitude that I see too often from many UK yard owners and managers when they talk about the various environment agencies they deal with, we need to have a collective effort from all salvage professionals to continually increase standards, and a passion to help others in the industry improve. This can only be completed by the industry coming together, putting aside the differences that many have to enable progress.
As the UK moves towards a General Election, what do the various political parties say about this, what questions should we be asking the local candidates and what should the party leaders be asked?
I have my own ideas about the questions that need to be asked, what about yourselves, comment on this blog and add your own questions, and I will collate them and put to the various parties on your behalf.