Don’t write it off just yet

•    Why are vehicles written off?
•    The four different types of write off categories
•    Legal obligations around a written off vehicle
•    Why you might consider buying a write off
•    Things to be mindful of with written off vehicles

 

We are all familiar with the term “write off” and you might have experienced the misfortune of getting the news that your beloved car, van or motorcycle has been written off – but is that the end of things?

Here we look at what the various categories of write off actually mean, and find out that getting the news that your vehicle has been written off might not actually be the end of the story.

So, why might a vehicle be written off?
Simply put, an event occurs where a vehicle has been damaged to the extent that the insurer determines that it is not economical for the car to be repaired.

This is not quite as simple as it might appear however, because if the car is worth £10,000 for example, and it is going to cost £9,500 to repair it, the insurer is still likely to write it off. Most insurance companies work to a repair-to-value “formula” – eg, if it’s going to cost more than 60% of the value of the vehicle it becomes an uneconomical repair and therefore it is declared a write off. This formula varies from company to company and even from car to car.

Write off categories
Car insurance assessors, whose job it is to calculate the cost of a repair and make the judgement call on whether a vehicle is economical to repair, will, when it comes to a write-off, assign it to one of four different categories.

It is these that determine what might happen next to the vehicle.

Category A and Category B Vehicles
A Category A or Category B designation basically signifies the end of a vehicle. In either case, the bodyshell of the vehicle will end up in the crusher. The difference is that, whereas a Category B vehicle might have some parts that can be salvaged and used to repair another vehicle, a Category A car cannot be stripped for parts: the whole vehicle must be crushed.

Category S*
Category S vehicles are those which have suffered structural damage. The damage is certainly beyond cosmetic and the vehicle won’t be considered safe to drive until it is professionally repaired.

Category N*
The good news if a car is categorised as an N is that the vehicle hasn’t sustained any structural damage – so the damage may be cosmetic, drivetrain or electrical, but obviously it is still deemed uneconomical to repair.

Why you might consider buying a written off vehicle?
So, this is where you as the owner (or as a prospective owner) might come into the picture as the insurance company can sell a category S or N car back to the owner (having paid them out at its current value) or on to a third party.

It might be that if you have a good independent repairer you can use or if you yourself are a competent DIY mechanic, they represent a really good value purchase opportunity. Getting the current value of the car back and then buying the car back for significantly less money can often leave you with a top condition car and a significant sum of money left over, once the repairs have been completed

Other than the level of repair required, there is a noteworthy distinction between a Category S and Category N write off, if it is purchased and repaired. A Category S vehicle requires a V23 form to be sent to the DVLA by the insurer or agent, when the car is declared a write off, and this is done without waiting for the V5C vehicle registration certificate. It is then the responsibility of the keeper to notify the DVLA when it is passed on after a payment is made. With a Category N vehicle, neither the DVLA or VOSA are notified.

Buying or selling a write off
If you are selling a car that has been written off, it is your legal obligation, as the seller, to inform any prospective purchaser of the history of the car.  

If you are buying a car with write off history, then it is worth knowing that the resale value might well be affected because of its history. However, if you are buying a vehicle first and foremost to use, then, providing the car has been well repaired – and it is worth having it checked and inspected before you buy – it might well be that it offers the opportunity of owning a vehicle that would not ordinarily have been in your budget.

*Category S was previously known as Category D and Category N as category D, but both were renamed in 2017