In recent times, there's been an increasing interest in buying and restoring written-off vehicles. The appeal? Often, acquiring a car at a price lower than its original cost. But the question remains: is it worth the risk and the effort? Take a look farther into the world of written-off vehicles and the factors you should consider.
What Does 'Write-off' Mean?
A vehicle is termed as an insurance write-off when the cost of its repair exceeds its market value. In simpler terms, if it's cheaper for the insurance company to replace the car rather than fix it, the vehicle is considered a write-off. Typically, a car is branded as uneconomical to repair if fixing it would cost 50%-60% of the vehicle’s value, although this percentage can vary, especially for newer vehicles. It's essential to understand that the value of a written-off vehicle can be unpredictable. The condition post-accident and the odometer reading can influence its value significantly.
Type of Write off?
Repairable Write Off (RWO)
Repairable Write off means the car has sustained damage but it can still be repaired. The car could be repaired and back on the road, but the insurance company declined to pay out due to high repair costs, so you should inform your insurance company about your intentions to possess and repair the vehicle as soon as possible. Once you own the car, the registration is automatically cancelled and you need to re-register it to legally drive again.
Statutory Write Off (SWO)
Statutory Write Off means the cars are wrecked and basically irreparable, but the parts could be scavenged and used for other cars. This type of write-off occurs due to major mechanical failures in the engine block, transmission case, cabin, or boot. Additionally, if the paint has blistered or if there is fire damage, unlike RWO it also can’t be re-registered in any states or territories, it’s highly risky to retain this vehicle.
Who Decides the Status?
Not just anyone can deem a car as written-off. It's a declaration that comes from qualified insurance professionals who weigh the cost of repairs against the car's market value. RWO and SWO can be both written off by the accessor but only RWO can be sold, typically through damaged-vehicle auctions, or, if the car had just extended third-party insurance by the owner.
The Importance of the WOVR
For anyone considering purchasing a written-off vehicle, familiarising themselves with the Written Off Vehicle Register (WOVR) is crucial. This register records vehicles based on their Vehicle Identification Number (VIN) and tracks their repair status, ensuring they are safe to be on the roads. Not all write-offs are the same. A Repairable Write Off (RWO) can, as the name suggests, be repaired and re-registered. However, if it's a Statutory Write Off (SWO), the story is different. For instance, in New South Wales, such vehicles cannot be reused on the roads.
Lastly, if you're serious about buying a written-off vehicle, a pre-purchase car inspection will be an invaluable suggestion. It offers an in-depth analysis of the car's current condition, helping you make a more informed decision.
Conclusion
Buying a written-off vehicle can indeed be a way to get a car for less, but it comes with its challenges. After restoring a written-off car, you might want to consider write-off insurance. However, ensure you're clear on the policy details, including the claims process, the valuation approach, and the premium calculations. If you're seriously considering buying a written-off vehicle, a pre-purchase car inspection can provide invaluable insight. It offers an in-depth analysis of the car's current condition, helping you make a more informed decision and understand the intricacies of the purchase,also to make sure you are prepared for the potential risks. With the right knowledge and approach, it could be a venture worth exploring.
