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.

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