Essential information for end of life vehicle dismantling, depollution and recycling

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Update on the ABI Salvage Code of Practice

Adam Murray, Aviva’s Motor Technical Manager provides a brief explanation of the history of the ABI Salvage Code of Practice and how, in Adam’s opinion, updates made have been for the better.

The ABI Code of Practice was established in 2007 to introduce a deterrent to vehicle crime, it was seen at the time that total loss vehicle salvage was a source that was considered to be assisting criminals to hide activities leading to higher numbers of vehicles being stolen for parts etc.

The Code of Practice was reviewed in 2016 and a revised Code of Practice was issued in September 2017, which has transformed the disposal and categorisation of motor vehicle salvage.

 The purpose of the Code of Practice for Disposal of Motor Vehicle Salvage was to provide a transparent history of the vehicle to innocent purchasers of vehicles and to record vehicles which are not suitable to return to road use.

Written Off or Total Loss Vehicles?

Typically, a vehicle which is treated as a total loss (also known as a “write-off”) is when the cost to repair the vehicle is higher than the actual value of the vehicle. A vehicle may, however, become an ‘economic total loss’ because other costs associated with the repair push up the cost of repairing it mainly due to the advanced technology that vehicles have installed these days that require recalibration or other costs such as mobility costs.

To accurately identify which cars that cannot and should not be repaired and should be broken for scrap (and not returned to the road) and to identify which cars are repairable and can return to the road, insurers use an industry-wide code of practice to categorise damaged vehicles into one of four categories.

All ABI members motor insurers support the Salvage Code of Practice and adhere to its provisions. To further improve transparency, each insurer has nominated a member of staff to ensure compliance with the provisions of the Code.

The code is intended to be reviewed regularly to maintain its credibility in line with vehicle build development which is rapidly changing as an emerging technology to support the Road to Autonomy is added to more vehicles.  

Thatcham recalled the Technical Steering group who wrote the revised Code of Practice for salvage disposal which was published late 2017 to review the Code of Practice. The group found that the revised CoP has improved the transparency and understanding which in turn has led to less disfunction and challenge in the salvage categorisation process.

2019 Revision

The group identified only two areas where revision of the 2017 Code was required, the definition 7.0 Vehicle Salvage Categorisation Flow Chart was amended and the words Total Loss removed, it was felt by the group that most vehicles that are dealt with as total loss were deemed repairable salvage, the term total loss describes something which cannot be repaired and caused an element of confusion.

The second area of change was 9.4 Historic Classic Vehicles where it was felt the wording required amendment as it was apparent that it was open to interpretation and allowed vehicles to be uncategorised that were outside the scope and interpretation intended by this clause.

The revised Code of Practice has been operating close to three years now and my experience of this revised code has significantly improved the transparency and understanding of the application of salvage categorisation, the introduction of the Appropriate Qualified Person has assisted to embed standards into salvage categorisation never seen previously so has been seen as a significant improvement. 

Fewer challenges and fewer issues arising from inappropriate salvage categorisation also leads to improved confidence in the buyers of motor salvage.

The main benefits identified by the salvage group were the reduction of the number of unrepairable salvage being sold. This will assist in removing unnecessary risk and improve confidence in buyers of repairable salvage, all of which is positive.

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