What you need to know before buying insurance write-off cars:

Insurance companies usually write off a vehicle if the damage to the car equals to or is close to the value of the car. This does not mean that it will become an unusable vehicle. When a car is declared written off there are documents that state what damages occurred to the vehicle and what has been done to repair them.

These cars are coded by the insurance companies before they are put up for sale:

  • Code 1 – New vehicles delivered by a dealer to the first owner
  • Code 2 – Used vehicles with one or more previous owners
  • Code 3 – Vehicles that have been involved in an accident, which, according to the insurer, is so bad that it is not worth repairing
  • Code 4 – Permanently demolished when chassis has been compressed, melted, destroyed or damaged.

The market for insurance write-off cars for sale in South Africa:

Rebuilt cars are amongst the cheapest cars in South Africa. An increasing number of vehicles are being auctioned because insurance companies are repairing fewer accident-damaged vehicles and writing more of them off, due to the high cost of repair to these vehicles. The reason is that the weak rand has significantly increased the cost of parts to repair cars.

Sometimes a repairable vehicle is scrapped too soon for a policyholder’s liking. This can happen if the sum insured is low. The SAIA Code of Salvage provides a guideline that if damage to a car exceeds 60% to 70% of the value of the motor vehicle, the car will be regarded as uneconomical to repair and be written off.

When policyholders look to buy a used vehicle they should check for SAP Vehicle Identification Numbers and Code 3 registration. This is to make sure that you don’t end up paying for then insuring a written off vehicle at its full undamaged price.

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