Buying a Write-Off Car: Pros and Cons
Tuesday, 21 August 2018
For those seeking a bargain, and who are willing to drive an older vehicle model, buying a used or a write-off car can present an ideal opportunity. However, buying your car this way is not without risk if you’re unsure what to look for.
Among the first considerations for a would-be buyer are the history and condition of the vehicle at hand. With updated write-off categories implemented in October 2017, it’s as important as ever to have a solid understanding about what each category indicates about the quality of the cars falling under them.
In this blog post we will break down the distinction between write-off categories, while also providing some key advice to ensure you get the most out of any second-hand write-off purchase.
Written off vehicles explained
Every time a car is damaged, and a subsequent insurance claim is made, the insurance assessor will examine the vehicle to establish the extent of damage done and estimate a repair cost.
A vehicle recorded as a ‘write-off’ has been damaged, at some point in its life, to an extent that an insurer has decided that the repair costs are uneconomical. There is a simple threshold (usually set at 50% of the car’s value at the time of the damage caused) at which the insurer can decide to write the car off and settle any claims financially. At this stage, the car will usually be surrendered and the insurer will sell it as salvage.
Determining what will happen to the vehicle next, it is assigned a category based on the amount and type of damage registered. The current write-off categories, enforced since October 2017, supersede those from the previous system.
Car Write-Off Categories
In Category A are written-off vehicles so badly damaged that they are considered completely beyond repair. Furthermore, no parts of the vehicle are considered salvageable. Never to be returned to the road, the destiny for Category A write-offs is to be de-polluted and shredded whole – destroyed so that, ultimately, no part can be used again.
Category B can be easily remembered by knowing that ‘B’, in this case, stands for ‘Break’. This means that the car may be dismantled and recycled for use as spare parts. However, the car, as a whole unit, will not be returned to the road. If breaking the Cat B vehicle for parts is unviable financially, then it will be sent to be shredded whole – just like a Cat A car.
Category S – formerly Category C
Previously known as Category C, the new Cat S contains vehicles which have suffered significant structural damage – enough that DIY repair is considered ill-advised. These cars are considered safe to return to the road if repaired properly.
The category change was made to emphasise the degree to which a vehicle is considered repairable, rather than basing classification on the financial cost of repair. However, expect insurers to continue basing most of their decisions on economic viability – it’s all about the bottom line.
Category N – formerly Category D
Category N, previously Cat D, refers to vehicles which have suffered non-structural damage to critical components – brakes, steering or suspension, for example. However, if properly repaired, Cat N cars are able to return to the road legally.
What you need to know about write-off classifications
The categories you are most likely to encounter on used car listings are Cat S and Cat N – ‘repairable total-loss vehicles where repair costs including VAT do not exceed the vehicle’s pre-accident value,’ according to the Association of British Insurers (ABI).
Cars in these categories often have very little damage recorded. Older models of car, however, are regularly written off – even for small scrapes and dents – because processing of the claim would cost more to the insurer than the car’s value.
The amended categories are intended to provide greater clarity about the extent of previous structural damage on the vehicles. This is due to the gradual rise in car model complexity, which itself has led to a rise in write-offs when costly electronic parts are faulty yet no structural damage has occurred.
Some vehicles, such as special interest models and ‘classic’ cars, can be repaired and returned to the road ‘irrespective of extent of damage,’ as long as their road-worthiness is proven.
Why buy a write-off car?
The main incentive for buying a car sold as repairable salvage is price. It’s entirely possible to find used models at a significantly lower cost than an undamaged model of exactly the same age and mileage. For this reason you will often see car dealers, repairers and average hobbyists purchasing Cat S and Cat N cars to repair and return to the road.
When buying a damage-repairable car, and to minimise the risk of buying one with unseen damage, it’s important to have a decent grasp on the potential cost of bringing the vehicle back to roadworthy condition.
If you intend to restore the vehicle to sell, the profit margin will have to be worthwhile. Car write-offs with Cat N or Cat S markers tend to be sold at lower showroom value, no matter how well repaired.
If, on the other hand, you are buying for personal use, then a hefty repair bill may be more bearable to you. Making even just a small saving on repair costs compared to a new purchase can make the effort sufficiently profitable, if the end result is a usable car model of special interest or emotional value to you.
If you decide that buying a Cat N or Cat S car is definitely the route for you, there is one key pointer to follow to ensure long term results.
Above all, it’s necessary to have a trained and accredited motor engineer inspect your vehicle; ideally, you’d use an engineer associated with organisations such as the AA and RAC. They will inform you of any risks associated with the car’s condition, its reliability in case of an accident, as well as any concerns beneath the surface level.
This process may not be cheap, but can be absolutely invaluable - and not just for peace of mind. An engineer’s report can be used as evidence in court (in worst case scenarios) and, in many cases, submitted as necessary information before any organisation considers insuring your Cat S or Cat N vehicle.
Suffice it to say, having a solid background of mechanical knowledge during and after restoring a second hand vehicle is an ironclad essential.
The pros and cons of buying a write-off car are not entirely clear cut. Ultimately, whether or not it is a good idea depends on your willingness to invest time and energy into the repair of the accident-damaged or salvaged car.
With the right level of technical know-how, a Cat N or Cat S car can represent exceptional value for money, providing customers with the opportunity to own their favourite car model at a fraction of the cost. At the other end of the spectrum, buying a second-hand car without the intent to carefully inspect and maintain its roadworthy condition can be an extremely costly enterprise.
Fortunately, with a range of providers offering comprehensive car inspections and a host of spare parts available at our on-site facilities, there’s no reason your salvaged car restoration shouldn’t go as smoothly as possible.
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