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Salvage – at what cost?

With over 30 years of experience as an assessor, Tony Simpson, President of the Institute of Automotive Engineer Assessors (IAEA), provides his opinion on categorisation and the potentially life-threatening issues he has encountered regarding salvaged vehicles.

 

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Tony Simpson

Having been brought up on an ethos and aspiration of professionalism and technical excellence in both my professional life and within the culture and objective of the Institute, I have come to accept such standards within our industry in general.

Over the course of time, the Accident Repair Industry has created a uniformed standard of professionalism and competence through the implementation of the British Standard BS10125 kitemark scheme for the Vehicle Damage Repair Industry. 

This has created a culture of certification and a level of requirements providing a recognised and trusted standard of repair, proving consumer confidence and reassurance in the documented endorsement of the repair process.

The ABI Code of Practice for the Categorisation of Motor Vehicle Salvage has also created a clear structure and consistency in salvage categorising. This has also been supported and enhanced by the AQP examination, which has again created a level of technical competence in the person making the salvage category decision. This person has obtained a level of technical education and training to a level necessary to make such an important and informed decision.

The IAEA must also take credit for its outstanding contribution to the industry in its continued quest for engineering excellence and the promotion of technical education and support for its members during its 89-year history. This alone is one I am sure we should all be very proud of and an area very dear to my own career. This evidently has been instilled by previous generations of IAEA members and passed down the generations, and has shown to be part of our culture and uniqueness.

From the consumer’s first notification of loss, through the claims handling and engineering process, transparency with a clear paper trail is in existence. During the total loss process, again, transparency and clarity of process exist. The salvage agent can also provide documentation of the sale and auction process.

However, once the buyer collects the salvaged vehicle from the salvage agent, the vehicle’s onward journey loses its audit trail and falls off the radar with the trail going cold.

Whilst we know that category A and B vehicles should be crushed once any usable parts have been removed; in the case of a category B vehicle and V5C, these should never be reissued by the DVLA, and in the case of category S and not so much category N vehicle, any onward repair has no recognised audit trail and providence. The purchased category S vehicles are without a doubt a potential area of concern, with the financial implications of the purchaser paying significant sums to secure the vehicle on online auctions and undoubtedly wishing to make money on the onward sale and investing in its total purchase and repair costs at a sum considerably below its market value and to return a profit on any investment. If not, the purchase of such a salvage endeavour would not be economical or financially viable. Once the auction price and bid have been successful, ultimately, the investment in the vehicle’s repair will be kept to an absolute minimum to secure the level of profit.

It is futile to believe that such a case will be repaired via a BSI 10125 accredited repair centre, as it is likely that the vehicle had already been estimated by a kitemark repair centre by the insurer’s network repairer and the correct and safe repair specification had already been prepared by an ATA VDA Engineer, therefore the vehicle was deemed beyond economical repair. 

Such repairs will predominantly find their way to smaller repair centres that do not have the necessary criteria to qualify for the BSI Kitemark status and are possibly in a position not to have adequate investment in the necessary equipment to execute a safe and appropriate repair, such as a body alignment jig, suitable welding equipment for modern vehicle materials and construction architecture. 

These type of repairers are more suitable to light external cosmetic crash damage repairs than the structural damage market that a category S vehicle falls into. 

Recently, I was asked to inspect a previous total loss vehicle that had a current MOT following its reinstatement to the road, and was being used as a licenced PCO private hire taxi. As part of my examination, I placed the vehicle on a ramp to facilitate an inspection of the undercarriage of the vehicle. I was absolutely horrified and shocked to see that body filler had been wiped into a deep crease in the crumple zone as part of the alleged repair process from my inspection of the right-hand side front chassis member. 

However, the person who had performed this operation had not even attempted to disguise such a practice. The original manufacturer’s paint hadn’t even been scuffed out, so the filler couldn’t even have a key, and the filler hadn’t even been rubbed down.

The owner was advised that the vehicle was not roadworthy, and a new chassis member was required with the necessary repairs requiring to be carried out using the manufacturer’s methods and the use of a body alignment jig. This was a clear example that no regulation or legislation exists to protect the public from such poorly repaired vehicles being returned to the road and ultimately being potential death traps in certain cases.

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An example of the poorly repaired vehicle

It is delusional to believe that the structurally damaged component on a category S vehicle, once sold on via the salvage agent’s online auction will be replaced. However, I’m sure there are exceptions, and I would like to believe that in some cases, the correct methods are adopted, and of course, I can only speak from my own experience. However, with such intrusive repairs and significant costs implications, together with the absence and ability to use the green parts option for the use of structural weld on integral components, the repair method of structurally damage component panels will be taken predominantly for the cost implication alone.

The fact that the integrity and providence of repaired salvage category S vehicles being reinstated and returned to the road cannot be verified must be an area of concern to both the consumer public and the insurance industry. Whilst the V5C records that the vehicle has incurred previous structural damage, the repair process has no form of endorsement of its quality and safety. 

The risk of the category A and B vehicles returning to the road has been addressed, but audit and transparency of the repair process of category S and N vehicle following the sale by the salvage agents is left in the abyss.

In an attempt to eliminate and mitigate this position, I see two possible options to achieve some form of regulation and control: 

  1. To lobby the central government to put in place a mandatory examination before the release of a new V5C vehicle registration document following the repair of a previous ABI category S or N total loss recorded vehicle. A comprehensive examination to be performed by a suitable qualified technical engineer such as an IAEA member, using a VOSA and industry-standard examination formula and procedure.
  2. Another opinion would be to remove the ABI salvage category of S, placing any structurally damaged vehicle into a B category and enhancing the potential use of the green parts options and greater accessibility, and ultimately transforming potential uneconomical vehicles into repairable propositions for the insurer. Again, once all reclaimed components parts have been removed from the vehicle, the residual shell or frame would have its identification removed, and the shell crushed accordingly. Any loss of revenue to the insurers being offset by the potential return of green parts sales. 

Clearly, to preserve and maintain the professionalism and integrity of our industry and the complete claims process, this area of concern identified must be addressed to protect the consumer and members of the public. The IAEA and other industry bodies, including the ABI, must recognise this issue and close this potentially dangerous situation. We must not be deluded into believing this situation does not exist, but it will remain in existence and be taken advantage of by certain individuals in the absence of any structured formal regulation.

To contact Tony, please email him at tony@agsclaimsconsultants.co.uk 

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Owain Griffiths

Owain Griffiths

Head of Circular Economy at Volvo Cars

Owain joined Volvo Cars in June 2021 to lead Circular Economy in the Global Sustainability Team. The company has committed to being a circular business by 2040 and has financial, recycled content and CO2 based targets for 2025, all of which Owain is working across the company to make happen. Owain previously worked for circular economy consultancy Oakdene Hollins where he advised businesses on evidence led circular economy implementation. 

Turning into a circular business and the importance of vehicle reuse and recycling.

The presentation will cover the work Volvo Cars is doing to achieve 2025 but mainly focus on the transformational work towards 2040 and the business and value chain changes being considered. Attention will be paid to the way vehicles are being dealt with at the end of life and the complexities of closing material and component loops. Opportunities and challenges which Volvo Cars is facing will be presented including engagement with 3rd parties and increasing pressure from stakeholders.

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e2e Total Loss Vehicle Management [e2e] is the UK’s only salvage and automotive recycling network with nationwide, environmentally compliant sites delivering performance resilience and service reliability to the insurance and fleet markets.  The network’s online salvage auction www.salvagemarket.co.uk drives strong salvage resale values and faster sales.  e2e’s salvage clients have access to the network’s stocks of over 5 million quality graded, warranty assured reclaimed parts. 

The power of the network model means e2e has the ability to influence industry standards and is committed to continually raising the bar whilst redefining the role and perceived value of the salvage operator.  Network members adhere to robust service level agreements, against which they are audited, in order to ensure performance consistency and a market leading customer experience.  

The salvage and recycling operating environment is evolving rapidly, and e2e is anticipating, listening and responding to changing market needs.  Regulatory compliance, ESG, reclaimed parts, customer experience, EVs, new vehicle technologies, data and reputation risk are just some of many considerations linked to the procurement of salvage services.  e2e will drive further added value to clients and members through the adoption and application of emerging technologies, continuing to differentiate its proposition and position salvage services as a professional partnership. 

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