Code 3 vehicles sold under Code 2 a serious concern

Vehicle dealers and their customers are being scammed through an illegal scheme whereby they unknowingly purchase cars that were previously written off and poorly repaired.

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These vehicles are still sold with a Code 2 registration code, the description for a used vehicle and not as a Code 3 vehicle, which indicates it was previously written off.

The South African Motor Body Repairers’ Association (Sambra), an association of the Retail Motor Industry Organisation (RMI), has highlighted the problem.

Sambra national director, Richard Green, said they have engaged with the SA Insurance Association (SAIA) over the years and requested public access to the vehicle salvage database, but SAIA had declined this request.

Green said access to this database would allow vehicle dealers and consumers to check if a vehicle has been written off before.

If a vehicle has been written off, there is a regulatory obligation on insurance companies to amend a vehicle’s registration on eNatis to Code 3. If a vehicle is irreparable and must be permanently destroyed that vehicle’s registration must be changed to Code 4.

Vehicle dealers, who preferred not to be named for fear of victimisation, reported that there is a lot of skulduggery in the salvage industry and it is absolutely ridiculous that SAIA and insurance companies will not allow public access to the database.

“There is absolutely no reason for them not to give that information,” said one dealer.

Another dealer said this problem was particularly bad about two years ago.

Green said the lack of information available to potential buyers in the used vehicle market about previously “written off” vehicles is unacceptable.

He said the only way for a vehicle that has been written-off to be registered as a Code 2 vehicle is through bribery and corruption.

Green added that Sambra believes a formal, publicly accessible write-off register will minimise the illegal use of vehicle identifiers in the re-birthing of stolen vehicles and in curtailing stolen vehicle parts being used in the repair of damaged vehicles, while also helping to eliminate unsafe vehicles for unsuspecting purchasers.

“If there isn’t a market for these cars, the practice will have to slow down,” he said.

Green mentioned two examples of previously written-off vehicles that were later sold as Code 2 vehicles to unsuspecting customers.

One involved a second-hand Ford Ranger that was purchased from a Gauteng dealer in August 2020 without the purchaser knowing it had been written off and deemed uneconomical to repair.

A total of 35 serious faults were highlighted in an inspection report, which concluded that the vehicle was very unsafe and dangerous to drive.

The other example involved an Audi Q5 that was written off in Cape Town in February 2019, sold on auction as a Code 2 instead of Code 3 vehicle that was poorly repaired before being sold by a Randburg dealership.

An inspection report of the vehicle by an assessor concluded the vehicle was dangerous and unsafe to drive because of 15 problems that would cost R120 659.03 to rectify.

Pamela Ramagaga, the general manager insurance risks at SAIA, said SAIA’s vehicle salvage database is for its members and has been created to combat crime in the non-life insurance industry and not for public use.

Ramagaga said 66% of the vehicles on South Africa’s roads are uninsured, which meant its database only includes vehicles from the 33% of vehicles that are insured.

SAIA believes the solution to the problem is effective policing of vehicles that are bought and repaired after being sold to ensure these vehicles reflect the right code in line with the SAIA Code of Motor Salvage.

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