A PUSH FOR TRANSPARENCY WITH VSD
The South African Collision Repair Association (CRA), in collaboration with other trade bodies such as the South African Motor Body Repair Association (SAMBRA), has been advocating for the establishment of a Vehicle Salvage Database (VSD) to enhance transparency in the used car market. The initiative aims to prevent consumers from unknowingly purchasing vehicles that have been previously involved in serious accidents, as this has become a huge problem over the last few years.
The proposed VSD would publicly disclose the Vehicle Identification Numbers (VIN) of all vehicles that were previously insured and subsequently written off. This information would enable potential buyers to check whether a vehicle they are considering has a history of significant damage.
The motivation behind this initiative stems from concerns about the sale of poorly-repaired vehicles to unsuspecting consumers. In the absence of easily accessible information, used-car buyers have often fallen victim to purchasing cars that have been inadequately repaired following accidents.
However, the implementation of the VSD is still pending further investigation. The South African Insurance Association (SAIA) acknowledges the importance of ensuring that all risks, including data security and potential misuse of information, are thoroughly considered and mitigated before making the database public. Viviene Pearson, CEO of SAIA, emphasised the need for transparency regarding the database’s benefits and limitations while engaging with stakeholders to provide progress updates.
Initially, SAIA had opposed the idea of making this information public, citing concerns about privacy and compliance with the Protection of Personal Information Act (Popia). The association argued that the VSD, containing policyholder information, needed to remain confidential to prevent misuse by criminals.
SAIA also pointed out that the database primarily contained information about insured vehicles, which make up only a fraction of the total vehicles on the road. Consequently, its usefulness would be limited in addressing the broader issue of unscrupulous sales and repairs of damaged vehicles.
In South Africa, approximately 90% of written-off vehicles are classified as Code 2 (used cars) rather than being reclassified as Code 3 (rebuilt). This classification leaves buyers unaware of the vehicles’ accident history. About 100 000 cars are sent to salvage yards in the country every year.
The reluctance to change the classification from Code 2 to Code 3 is partly driven by financial considerations, as insurers receive substantial payments from auction yards for written-off vehicles. However, Steve Kessell, Operations Director of the Collision Repairers Association (CRA), emphasises that this practice leaves consumers vulnerable to predatory sellers and repairers.
The lack of clear legislation on when a vehicle should be permanently deregistered as “unfit for use” exacerbates the issue. The absence of defined write-off thresholds allows insurers to profit from vehicles that are declared total losses at low values.
Efforts to rectify this situation involve advocating for clearer regulations, aligning practices with European standards, and establishing the VSD to empower consumers with the information they need to make informed decisions when purchasing used cars.
In summary, the South African Collision Repair Association’s push for a Vehicle Salvage Database represents a significant step toward enhancing transparency and consumer protection in the used car market. It addresses concerns about the sale of poorly-repaired vehicles and aims to empower buyers with vital information about a vehicle’s accident history, ultimately contributing to safer and more transparent transactions in the automotive industry.
A reputable second hand car sales platform is already compiling their own VIN database as well, which will also go a long way to filling in the gaps between insured and uninsured vehicles. These databases need to be merged to give a more complete picture.
While it is a significant step in the right direction, the continuing problem of Code 2 vehicles, declared uneconomical to repair in many cases, with only slight cosmetic damage, is often assessed by insurers and then auctioned off. All too frequently, these vehicles end up poorly maintained and rebuilt, continuing to harm unsuspecting drivers, all to the benefit of unscrupulous practices. Profit is pursued at the expense of the South African auto body repair shops.
This issue should be the next focal point for exploration in the salvage database of SAIA. It’s a trade practice that has gained considerable traction in the last decade and is blatantly unethical; to the car owner and body shop repair trade.
Story by: Claire Macfie
