Thousands of cars which have been written off by insurance companies are finding their way back on to the second hand market every year – and it is all legal. They can save buyers hundreds – if not thousands – of pounds, but experts warn that they can also be a source of trouble down the line.
Write-offs which reappear in this way are known as Category D cars under a voluntary code of practice signed by various organisations, including insurance companies, salvage and repair agencies and the police. The agreement puts accident-damaged cars into one of four categories. Category D is for the most lightly damaged cars, or those which were stolen and recovered after the owner had been paid by the insurance company.
The official description of a Category D car is one that has suffered accident damage that would cost less to repair than its value. But why would an insurer write off a perfectly repairable car? Ironically, according to experts, the insurance company cuts its losses this way.
Imagine that a car worth £5,000 is lightly damaged in a minor accident. The insurer may have to pay to have it towed to an approved repairer and stored. It will have to send out an assessor to inspect the damage, and may have to cover the owner’s costs for a hire car. There could also be personal injury expenses.
If the airbags have gone off, replacing them can easily add £2,000 to the repair bill, and features such as seat-belt tensioners or parking sensors will increase it further. With insurers able to claim up to 65 per cent of the car’s value from salvage companies, they can often be in pocket by writing the car off and allowing an independent garage with lower overheads to repair it.