What’s Next For Motor Salvage?

ABI, Department For Transport, Motor Salvage, Motor Vehicle Dismantlers Association, Salvage Vehicle Categories, Thatcham Research, Vehicle Recycling, VIC Scheme

The Vehicle Identity Check (VIC) is set to be abolished in October 2015, which creates an urgent need for a review into how salvage vehicles are managed. The VIC system was implemented in 2003 to eliminate vehicle cloning and has seen over 900,000 vehicles subjected to a check. However, only 38 vehicles (0.004%) were found to have been cloned.

We lobbied extensively as a key member of the Motor Vehicle Dismantlers’ Association (MVDA) to abolish the VIC as the check adds substantial costs for any party looking to repair Category C vehicles. As a company 70% of the salvage we process is classed as Category C therefore, £41 for each VIC adds significant costs to our business operation. In addition, the inconvenience of arranging a VIC test, transporting the vehicle to/from a VIC testing location and waiting up to 6 weeks for an allocated test slot then a further 6 weeks for the V5C to arrive only creates additional headache. Most damning for us with the VIC requirement is the loss in value of Category C vehicles that it causes. To bypass the VIC many Category C vehicles were being scrapped prematurely or exported to markets where the VIC didn’t exist. In result the demand for spare parts that would normally be used to repair these vehicles is reduced.

In light of the impending abolishment of the VIC the Department for Transport (DfT) has tasked Thatcham (experts in vehicle safety) and ABI (The Association of British Insurers) with reviewing the Motor Salvage Code of Practice (CoP) and improving the system moving forward. Currently the CoP is voluntary however, as a key stakeholder we want to ensure that the CoP creates a level playing field for all operators, free of manipulation with transparency, consistency, honesty and consultation forming the spine of the salvage code. In addition, we need the updated CoP to be overhauled to promote compliance backed by legislation that will punish criminal activities and potentially dangerous practices which are encouraged by the CoP in its current format. All parties producing motor salvage (UK and Europe) must be bound by legislation if the updated code is to achieve success and our backing.

The CoP currently groups vehicles into four categories (A, B, C & D) and is manipulated by certain stakeholders to our (MVDA members) detriment. Re-classifying a vehicle from Category B to Category C makes it available to unlicensed dismantlers (UK and international) who can reap the benefits of selling parts without baring the costs that we dismantlers incur (including taxation). Approximately 100,000 Category C vehicles disappear each year as the result of illegal dismantling.

Thatcham and ABI have delivered a draft CoP to the DfT which proposes the following changes:

• Four salvage categories reduced to three: Break (B), Structural (S) and Non-Structural (N)
• ALL V5C registration documentation to be marked in the case of salvage

The reduction in categories will see Category A & B vehicles condensed to the category Break (B). Vehicles in this category will have been deemed unsuitable for repair by a qualified assessor and must be destroyed.

Category C and Category D vehicles will be reclassified as either Structural (S) or Non-Structural (N) under the proposed new CoP. Vehicles will have been inspected by an appropriately qualified person and declared suitable for repair. As the wording suggests the vehicle will be categorised depending upon whether it has achieved structural damage, or not.

Moving forward every salvage vehicle will have its V5C marked. We see this as a significant development and something that brings about enhanced transparency, provided that the V5C can be obtained cheaply and in a timely manner.

Airbag prohibition is set to be carried through to the updated CoP and is something that needs addressing. We firmly believe that making airbag sales illegal in the UK would simply encourage buyers to go underground with only illegal operators benefitting.

It must be understood that the CoP update is work-in-progress and still requires work for all parties to be satisfied. We’ve made our concerns known and laid out what we see as the best course of action moving forward. If industry and consumer confidence in motor salvage is to increase the CoP must develop from being an advisory guideline to imposed legislation that encompasses all EU members and creates an equal playing field.

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