The rules governing the way the UK salvage industry works are changing. Many of these changes will be ‘behind the scenes’ but the most obvious for our salvage customers will be the salvage categories.
These changes are happening because, following the end of VIC in 2015 and because of concerns about new vehicle materials and technology, the ABI (Association of British Insurers) updated its Salvage Code of Practice – the rules by which the UK salvage industry works.
These new changes start to come into effect on 1st October 2017
The most visible change for salvage buyers will be to the ‘repairable’ categories:
The reason for this is that the new salvage categories S and N will reflect the type of damage to the vehicle, making it more transparent for customers.
The non-repairable categories A and B remain.
At present, whether repairable salvage is categorised as C or D depends on the cost of repair compared to the pre-accident value. This will no longer be the case. Under the new system the category will simply depend on the type of damage, without any comparison of the cost and value.
Salvage with damage to the structural parts (realignment to original dimensions or replacement of frame or chassis) of the vehicle will now be category S (S for Structural). As in the case of category C currently, insurers will destroy the V5C registration document and buyers will need to apply to DVLA for a replacement V5C. This will continue to be FREE OF CHARGE. The replaced V5C issued by DVLA WILL be annotated (as Category C currently is) but the wording will change, reflecting the new category definition, to: “This vehicle has been salvaged because of structural damage but has been declared suitable for repair following a technical evaluation.
Salvage that does not have any damage to structural parts will now be classed as Category N (N for Non-structural). As currently the case with Category D vehicles, the insurer does not have to destroy the V5C and should pass it on to the salvage agent. However, if the V5C or the green slip Is not available, an application to DVLA for a replacement V5C will be at the standard rate (currently £25). The reissued V5C will NOT be annotated.
SUMMARY OF NEW SALVAGE CATEGORIES
|Definition||Scrap only||Can be dismantled for spares parts||Non-structural damage||Damage to the structural frame or chassis|
|V5C supplied with salvage?||No. Insurer destroys||No. Insurer destroys||Yes, if available||No. Insurer destroys|
|DVLA reissue V5C?||No||No||Yes||Yes|
|V5C application cost?||n/a||n/a||Yes||No|
A copy of the new Salvage Code of Practice downloaded from the ABI website here.