Salvage Wire

Salvage Wire
Helping Automotive recyclers become leaders in their industry

Thursday 23 May 2013

The 'S' Word

The word is ‘Scrapyard’ (or Junkyard in the US), and sets customer expectations of a dirty, smelly, dangerous area behind steel fences inhabited by scruffy, intimidating staff and their dogs. Yards piled high with old cars leaking all sorts of harmful fluids.

Nothing can be further from the truth with today’s professional Auto Recycling Operations.
These yards are clean, tidy, safe and very environmentally friendly. Vehicles are de-polluted in specialist areas so that all hazardous materials are removed before they then get stored in a fully concreted yard on specially made racking.

More importantly, 85% of each vehicle is recycled (rising to 95% in 2015), and each vehicle dismantled and recycled means less virgin raw material is being used with a reduction in carbon footprint globally.

In the UK Auto Recycling yards are licensed by Environment Agencies, and details of each yard can be found on the relevant web sites for each part of the UK (England, Wales, Scotland and N Ireland). These licensed sites meet the minimum standards set by the licensing authority and are regularly inspected to make certain they keep to the appropriate level of compliance.
There are many companies whose standards far exceed the minimum required; most of these are set apart through membership of the 2 industry associations, the Motor Vehicle Dismantlers Association (MVDA) and British Vehicle Salvage Federation (BVSF). You can see details of members on each association web site where they also set out their standards of membership.

Whether you are scrapping a vehicle or purchasing parts use of an MVDA or BVSF member will ensure that your vehicle is dismantled to the highest standards, is good for the environment, and could enable another customer to obtain recycled parts to repair their vehicle that may be too costly from the vehicle manufacturer.

Auto Recycling is a sustainable and environmentally friendly profession, just don’t mention the ‘S’ word!

You can find more information about the MVDA and BVSF at the following web sites:

Tuesday 21 May 2013


2 companies, both in the business of recycling cars, within 20 miles of each other, family owned and run, and I visited both on the same day  – there the similarities end.
Leaving the first company I was enthused and motivated by their passion, vision and energy, I wanted to slit my wrists as I left the second business because I was so depressed.
Completely embracing the internet age, company number 1 has designed a process where the vehicles are dismantled, all parts quality controlled, tagged, imaged and racked, then listed on e-bay and sold. At the time of my visit they had over 12,000 listings on e-bay and were selling in excess of 200 items per day.
When I arrived at company number 2 I was immediately met by de-motivated owners and staff telling me that the business was running on fumes, had no future and was just ticking over; the owners had recently invested in another business and were putting their efforts into that, giving the message to their staff that the auto recycling business was not important to them.
The main question that I came away from this under-performing business was how did this happen? This is a business that has been running for over 30 years, very successfully giving a living to the owners and quality employment to their staff, yet it is now struggling to survive. Unfortunately the negative attitude of the owners didn’t give me any hope for a better outcome apart from closure or sale.
The difference between both companies can be summed up in one word – Vision.
The owners of the first company have a vision of the future where they are a factory that is producing green recycled parts, and sell thousands of parts daily using on-line platforms (e-bay is only one tool that they could use). The other company do not have a vision for a successful future for their business at the moment.
Vision is essential for any business to survive; the vision needs to stretch the staff to perform better, for the company to be more efficient, and for customers to want to return and also to recommend their families and friends to that business.
A vision statement can take a number of months to complete; the vision will be looking 3 to 5 years ahead and show a picture of how the business will look at the end of that time period, it needs to include commitments to profit, turnover and quality, and these must be time specific. The next important action is to provide yearly steps towards the ultimate vision, this suddenly makes the vision realistic and achievable for all the staff, they can see the end of the journey and how they are going to get there.
One of these visits has reassured me that the auto recycling industry has visionary owners and managers, who are not afraid to challenge conventional methods, design new and more efficient processes, change and adapt to new ways of operating; the other visit showed that some owners are not able, or do not want to change from the business plans that their fathers or grandfathers put in place many years ago, and they also cannot understand that if they do not change then there may not be a business to run in the future.
Salvage Wire can help you complete a vision for your future, see our web site ( for more details on how to contact us.

Monday 20 May 2013

Total Loss Protection for Consumers

Following an increased incidence of fraud involving vehicles written off by UK Motor insurers during the 1990’s the Insurance Industry worked together to produce a Code of Practice for motor Salvage which was endorsed by the Association of British Insurers and had to be adhered to by all ABI members.
The basis of this voluntary code was consumer protection, ensuring that vehicle information was made available to the industry and consumers, thus ensuring that vehicle history could not be hidden, that unsafe vehicles would not be brought back into use, and that the insurance industry could be better prepared to investigate and cut insurance fraud.

There are many parts to the code, relating to the initial vehicle inspection and total loss decision, the handling of vehicle documents, release of publicly available information, and the onward sale/use of the salvaged vehicle.

If a vehicle is deemed a total loss by the inspecting engineer then they will decide the salvage categorisation. There are four categories, A, B, C and D.
Category A is pure scrap, has no value and should be treated and processed immediately.
Category B is break only – The engineer has deemed the vehicle to be too badly damaged to be put back into use, so in this instance bolt on parts in the vehicle can be removed and may be re-used in another vehicle, however the vehicle structure must be destroyed – effectively taking the vehicle out of use.
Category C is repairable salvage, where the assessed cost of repair exceeds the insurance value of the vehicle. This repair cost should be determined using normal methods of insurance repair to the standard that is expected by a customer. Once in the salvage market, the use of second hand parts, cheaper labour costs, or a decision not to complete ‘cosmetic’ damage makes the vehicle repairable.
Category D is constructive total loss, where the repair cost is less than the insurance value. The gap here would be bridged by other costs, including the value of the vehicle in its’ damaged state and the loss of use costs associated with alternative transport.

Only category D vehicles will be supplied with vehicle documentation, enabling the vehicle registration to be transferred to the new owner.
Category C cars will have to go through a Vehicle Identity Check (VIC) to ensure that the vehicle is not stolen prior to any application for replacement vehicle documentation.
Category A and B vehicles are being taken out of use, so there is no vehicle documentation supplied, and the salvage customer is expected to complete a Certificate of Destruction to record the end of the vehicles life.

In all cases, the details of the claim are placed on the Motor Insurance Anti Fraud and Theft Register (MIAFTR), which records the claim, the vehicle, and any salvage category. These details are available to the UK Insurance Industry for future reference.
Additionally, the vehicle details, including the salvage category are made available to DVLA and HPI.
The DVLA use the data to control and administer the VIC scheme, and HPI make the information available to the public when they complete their own vehicle checks.

Bearing in mind that this is a voluntary code it achieves a great deal of consumer protection, by ensuring that the vehicle history is available to the general public through HPI checks, limiting the availability of vehicle documentation which could then be used for fraudulent activity, ensuring that unsafe vehicles are taken out of use, and that vehicle licensing records are complete.

Premature End of Life Vehicles

By their definition Premature ELV’s are vehicles that have not survived the expected life span of 12-15 years that most vehicle manufacturers build into their vehicles.
The reasons for this can be many, however I suspect that most will be due to accident, fire, flood or other events that result in an insurance claim.

Insurance engineers completing vehicle inspections need to determine if the vehicle could be repaired economically; if repair is not viable, then vehicles need to be dealt with as salvage and the inspecting engineer must determine if the vehicle is safe to repair, or must it be removed from use?

One of the most important decisions that an engineer makes is deciding if the vehicle ‘could’ or ‘should’ be repaired; the Engineer needs to know the extent of damage, potential method of repair and availability of parts.
Knowledge of vehicle construction is very important here, especially as manufacturers try to save weight whilst developing stronger vehicle bodies, the greater use of high strength steel makes repair increasingly difficult and any motor salvage inspection needs to balance repair potential against passenger safety – in other words, can any professional engineer signing a vehicle write-off report confirm that the vehicle could be repaired to a standard that would maintain occupant safety in the event of another accident.

Developed over many years the Association of British Insurers (ABI) Code of Practice for Motor Salvage assists the decision making process when inspecting vehicles in the UK that are written-off.
The ABI code has four categories of salvage that are:
  • Category A. Scrap vehicles, good only for the shredder and metal recycling
  • Category B. Break only – bolt on parts can be re-used, but the vehicle structure is so badly damaged that this must be removed from use and destroyed.
  • Category C. Repairable Salvage – repairs using normal methods of insurance repair (brand new parts, manufacturer labour) exceed the value of the vehicle, however cheaper labour, second hand parts, or ignoring ‘cosmetic’ damage means that the vehicle could be repaired in the salvage industry.
  • Category D. Constructive Total Loss – where the repair cost of the vehicle when added to other costs, such as loss of use, or the value of the salvage, exceeds the value of the vehicle, then insurers can decide to treat the vehicle as a write-off and minimise their costs. As an example, a £10,000 vehicle with £8,000 worth of damage may return £3,000 salvage, so a settlement of £10,000 less £3,000 salvage return gives a final outlay of £7,000 against the claim. Less than the assessed repair cost of £8,000.

There are a number of factors that need to be reviewed when inspecting potential write-offs, including type of damage, repair required to maintain occupant protection, and availability of parts; a few examples are detailed below.

Flood Damage.
Factors to consider include type of water – fresh, salt or contaminated (sewage), height of water, and length of time in water.
Current trends towards increasingly complex electronics will mean that any salt water damage will render the vehicle unrepairable, and if a vehicle has been submerged to a significant depth – for example water high enough to contaminate air bags) then the vehicle should be removed from use.

Fire Damage.
Excessive heat removes the strength from High Strength Steel, so fire damage to structural areas of newer vehicles is serious, I would contend that, unless the damage is very localised, all fire damaged vehicles should not be repaired.

Parts Availability.
A vehicle severely structurally damaged where parts are not available should not be repaired, releasing one of these vehicles into the motor salvage market for repair could lead to a substandard repair being completed and the general public being put in danger as an unsafe vehicle is in use. Engineers need to know what parts are available from the vehicle manufacturers and any safeguards they put in place. For example, many manufacturers place controls on the supply of replacement bodyshells that could result in these not being available to the salvage industry, thus compromising a safe repair on motor salvage.

In summary, all motor engineers inspecting vehicles for insurance repair need to be fully aware of current vehicle design and construction, they need to know repair techniques for all types of vehicles, and also decide if a salvage vehicle can be safely repaired and placed back into use.
And we haven’t started on electric vehicles yet!