If your car is damaged, your insurers might declare it a write-off. This may sound scary, but you don’t need to panic.
What is a write-off?
A write-off happens when your vehicle is damaged in some way, and your insurers determine that the repairs are not economical. Generally, this happens if the cost of repairs totals or exceeds 50-60% of the vehicle’s current value. So, if your car is worth £6000 and the cost of repairs comes to £4000, your insurers may well have your car written off.
The Association of British Insurers have created four categories of write-off: A, B, N, S.
- Category A means the whole vehicle has to be crushed.
- Category B means some parts can be salvaged, but the body shell needs to be crushed.
Depending on your level of insurance, you might then receive a cash payout, known as the settlement fee. This should be equivalent to the market value of your vehicle if sold in its pre-accident condition, but minus your policy excess. For example, if your excess was £300 on your £6000 vehicle, you would therefore get £5700.
In the other two categories, although repairs are possible, the insurers may not feel it is financially worthwhile to do so.
- Category N is for non-structural damage, like cosmetic or electrical damage. You won’t need to re-register with the DVLA before returning to the road.
- Category S is for structural damage where the car can be driven again after repairs. The car will need to be re-registered with the DVLA.
What to do if your car is written off
Should the damage to your car fall into Categories N or S, you can choose to buy it back from the insurers and repair it yourself. If you do this, you must inform the DVLA. They can re-register it and you can drive it on the road again. If you sell it on in the future, a vehicle history check will show it as previously written off.
Regardless of the category of write-off and your settlement fee, you must tell the DVLA if your car is a write-off. Failure to do so could lead to a fine of £1000.
If you want to keep your car
Just because your insurers feel that repairs are uneconomical doesn’t necessarily mean repairs cannot be done. The damage may only be cosmetic – although if your car is old, even cosmetic repairs may cost more than the value of the vehicle.
If your vehicle is Category B or below, you can choose to keep it. Category B vehicles cannot return to the road, but you may be able to salvage usable parts, particularly if it is a rare or modified car.
As mentioned, you can choose to repair a Category N or S vehicle. Your insurers will then give you a payout, minus the salvage fee, and give you the vehicle back. You can then get it repaired privately. Selling it on is also an option, but you’ll need to make sure the car passes an MOT first.
If you have outstanding finance
If you purchased your car on finance, your settlement fee should ideally cover the outstanding finance. However, the amount you are paid may be lower than what you owe the finance company. This could leave you out of pocket, either because you’re paying for a car you aren’t using, or because the finance company wants you to pay off the outstanding balance immediately.
It may be worth discussing the issue with your insurers and your finance company. If you can provide evidence that the car’s pre-accident value was higher than the settlement fee being offered, you may be able to negotiate a higher fee. You may also be able to come to an arrangement with the finance company regarding switching the deal to a new car or clearing your debt. Gap insurance can also help pay off your financier.
If your car was damaged in an accident, you can claim against the other driver’s third-party cover. This won’t affect the amount of your settlement fee, but you may be able to get your policy excess back.
READ MORE: Scrap Your Van
It’s not the end of the world if your car is written off. Here at A&L Scrap Car Dealers, we can help you easily get rid of a car you no longer need or want. We buy almost any car in almost any condition, including write-offs.
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