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Over 50 key stakeholders, including representation from the Gauteng Department of Roads and Transport, attended the Vehicle Write Off conference in Johannesburg last week to discuss the critical need for an open and transparent Vehicle Salvage Database (VSD) of all vehicles that have previously been “written off” by insurers, and to discuss critical next steps in implementation.
Charles Canning, National Chairman of the South African Motor Body Repairers’ Association (SAMBRA), a constituent association of the Retail Motor Industry Organisation (RMI), opened by saying it has been 18 months since the first conference and it was disappointing that there had been very little progress from the South African Insurance Association (SAIA).
“If you fast forward to today, we have had a high court judgement in January 2023 finding in favour of a consumer who unsuspectingly bought a previously ‘written off” car and countless documented reports of innocent consumers that have been sold a second-hand car only to find it was unsafe and previously written off as uneconomical to repair.”
Canning said in many cases these are cars that have been insured by Insurance company X and written off, and are now being reintroduced and refinanced and reinsured, often by the same finance houses.
“There is no doubt this is a sensitive issue that involves multiple stakeholders in the value chain but the ultimate casualty is the consumer and it is criminal that the information is not freely available. The fact that SAIA has already recorded a total of 14 329 searches on their newly launched Vin Look-Up points to the need for an open database. What is however concerning, is the hit rate is extremely low based on access to data currently available on the site.”
Canning says for the MBR sector it has become increasingly difficult to get information from the scrapyards about which cars are ending up in their yards so the only reliable source of information is from the insurers themselves and yet this has not been forthcoming. SAMBRA, which manages over 80% of all insured car accident repairs, says it has seen a huge decline in vehicle repairs over the last couple of years.
“Insurers are now writing off at 50% of the value, seemingly recouping a better price at the scrapyards. “The problem is the licence documentation is either being cloned for stolen vehicles; the cars broken down for parts or the vehicles themselves being poorly repaired and landing back on dealer floors.”
SAMBRA’s national director, Jacques Viljoen, also noted these cars are not appearing in searches. Chris Viljoen, an Independent Forensic Motor Assessor, who has vigorously been testing the effectivity of the system illustrated his findings on seven previously written off cars entering the necessary Vin and Engine numbers into the SAIA Look-Up system. The SAIA site yielded 0/7 successes. Five were then loaded onto the VinDocs site which picked up 2 of the 5 cars.
The critical problem facing South African consumers and MBR’s is that cars that are still classified as Used (Code 2) on the Natis documentation can certainly have been accident damaged or economically written-off.
“We can see that there definitely is a common thread occurring. Most of these vehicles end up on online portals. Unsuspecting consumers search the web for a vehicle in a specific price range and are directed to vehicles which may not end up being what they appear to be online. We strongly recommend consumers, before they make any decisions, ask the dealership for more substantiating photos of the car’s defects and a full defect list. If the dealer declines, alarm bells should be ringing. Cars should also never be bought without a physical inspection by a qualified assessor or from a reputable dealer,” says Viljoen.
He did however caution there are different scopes of inspection. The ultimate would be a forensic examination, followed by a condition report with photos and lastly a roadworthy station test which is governed by the Road Traffic Act and provides rejection criteria.
Ferose Oaten, Chairperson of the Vehicle Testing Association, did however emphasise that even a roadworthy check is not a comprehensive safeguard. “We only check for visible signs of damage, but if a car is well repaired, it is difficult to detect accident damage within the scope and equipment constraints of a roadworthy inspection. The 174 printouts which helps the correlate the information physically from the vehicle (engine and chassis number) from Natis also do not include the status Code of the vehicle so we can only look for things like jig marks, gaps in body panel adjustment, evidence of welding and repairs by heating, among others,” says Oaten.
She says there is no reason for rejection of Code 3 or accident damaged vehicles if it complies with current scope of roadworthy testing and is well repaired. Current challenges include vehicle identification by the Engine number which is not visible in modern cars. Safety of HV components is becoming a big concern; examiners have no access to the Code status of the vehicle and the equipment used in the test stations is geared to roadworthiness and not accident damage, unless visible.
“It is definitely time we look to synchronise the Natis with the salvage codes and aim to integrate the vehicle salvage data base with Natis too. Transparency is key so the vehicle status code should always appear. In addition, the Code 2 spectrum should be broadened to distinguish between normal Code 2 (used vehicles) and Code to vehicles which have been in an accident. Authorities need to enforce the international SANS 10047 standard with regard to welds. In addition, for vehicles repaired after any accidents, post inspections should only be carried out by Independent and skilled experts. In most other parts of the world, there is a system of periodic technical inspection (PTI), and the requirement for a PTI after a reported accident or if the vehicle code is reclassified.”
The last speaker, Brandon Cohen, national chairperson of the National Automobile Dealers’ Association, (NADA) reiterated how important vehicle information and data is, not only to the consumer purchasing a vehicle or to the bank financing such, but also to the vehicle dealer that trades-in vehicles for sale in their used vehicle departments.
“It goes without saying that selling an accident-damaged vehicle has the potential to result in significant financial losses for dealerships plus significant reputational risk if there is a safety event,” says Cohen. Dealerships receive cars on a daily basis that have been previously written off. The systems that provide accident damage data for a fee are not universally supported and do not have full crash information. So essentially there is no single database accessible by the vehicle dealer to determine whether there has been a write-off of the vehicle or accident claims.”
Cohen says as we stand, SAIA does offer very limited crash data but this only covers codes 3 and 4 and access is not open for high volume checks. A further concern is that if the vehicle is not the same brand as the franchise of the dealer, the dealer will not have access to the OEM systems to check for crash, panel or other information (noting not all OEM’s record such) and visual checks do not always uncover a well-repaired vehicle’s prior damage.
Although complex and multifaceted the starting point is free, transparent access to a comprehensive data base. “We are delighted Government are open to getting involved and confirmed the Department of Transport will issue an invitation to the industry to discuss the way forward. Regulation is definitely first prize, where the Code status of a vehicle is defined in law (including a specific economic write-off code) and insurers and other entities with knowledge of crash and write-off data are required to submit such data to a central repository.
Any voluntary system is not likely to achieve the goal of obtaining the information which is so critical to saving people’s lives and combating illicit and illegal trade in vehicles and vehicle parts. We will be actively pursuing our collective discussions,” concludes Canning.
