What is a car insurance write-off and how are the categories changing?

Car Write-offThe Association of British Insurers (ABI) is changing the code surrounding vehicle salvage and scrappage for the first time in over a decade. The moves are designed to take dangerous vehicles off the road for good and make it easier to buy second-hand cars with confidence.

Insurance ‘write-offs’ have traditionally been assigned a category which reflects the level of damage or the cost of repairs as follows:

A: Scrap (entire vehicle must be crushed)
B: Break (bodywork must be crushed but some parts may be salvaged)
C: Can be repaired but uneconomical (the ‘repair only’ costs are too high)
D: Can be repaired but the overall bill is uneconomical (including associated costs such as transport and storage)

Until now both category C and D vehicles could be repaired and put back on the road, but used car buyers were commonly getting confused about the roadworthiness of potential purchases.

In recent years cars have become increasingly complex and the cost of replacing expensive electronic components can easily outweigh the overall value of the vehicle; making repairs uneconomical.

Even something as simple as a dented bumper (fitted with parking sensors) can cost thousands of pounds to replace. Second hand car buyers were being forced to focus on the cost of repairs rather than the condition of the car.

Next month the categorisation will change to give a clearer picture of any structural damage and increase transparency in the marketplace. Categories A and B will remain the same while categories C and D will be replaced with N and S as follows:

N: Non-structurally damaged but repairable

S: Structurally damaged but repairable

The new measures have been warmly welcomed by the motoring community and will doubtless help identify botched repairs and ‘death traps’ that have been put back on the road. However, some commentators don’t think the moves go far enough and rather than signing-up to a voluntary code are seeking legislative changes.

Remember that if you are buying a used vehicle it’s essential to get a HPI check to uncover whether the vehicle has a hidden history which the salesman doesn’t want you to know about.

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