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European Salvage has serious issues

It's all too easy on the continent to illegally return salvage to the road. Photo courtesy of SalvageWire.
Insurance companies in the European Union are failing to protect themselves and their customers from fraudulent and unscrupulous actions on written off vehicles.

In the UK, motor insurers tend to take control of written off vehicles and dispose of them through their contracted agents, but in mainland Europe the process is significantly different.

Insurers will calculate the value of the written-off vehicle and deduct that from the settlement figure they give to the vehicle owner, the vehicle owner retains the salvage and is given details of the company offering the best value for their vehicle, the owner is then free to make their own decision about disposal of the damaged vehicle and can sell the vehicle to the recommended company or a person or company of their own choosing.

This means that there are thousands of damaged vehicles across Europe, complete with owner documents available to purchase; vehicles that could be transferred across borders, re-registered, poorly repaired, or used to clone a stolen vehicle, and these ‘death traps’ or clones could be purchased by an unsuspecting consumer because record keeping across the continent is so poor.

No-one is certain how much of an issue there is in mainland Europe with poorly repaired write-offs or cloned vehicles; the lack of controls and poor data mean that there is very limited information to work with. Failure to control disposal of vehicle salvage could be costing insurers millions of Euro’s every year in fraud or stolen vehicles.

Andy Latham
The writer of the this article is Andy Latham, MD of specialist consultancy to the auto recycling industry, Salvage Wire. Andy is a motor vehicle engineer with over 30 years experience in automotive retail, motor insurance and vehicle salvage markets.
Just imagine that you have a lovely Porsche like the photo which is heavily damaged on the autobahn, the insurer calculates the value of the vehicle, deducts the salvage value and offers you the difference. You go away and sell it to the highest bidder who collects the vehicle and pays cash. This buyer then has the vehicle and ownership documents and he takes both into another country where it is joined by another, undamaged Porsche, exactly the same model and colour but this vehicle has been stolen in a third country. The stolen vehicle is then given the identity of the damaged Porsche and appears with ownership documents and service history on a car sales lot; it looks to be a fully legitimate vehicle in the eyes of the next ‘owner’. A classic case of the insurance industry costing itself money; lack of controls at the write-off stage mean another insurer pays out for a stolen vehicle in a different country.

It is about time this changed, the EU has lots of controls in place about the construction and use of brand new vehicles, and also about the destruction and recycling of these vehicles at the end of their lives, but very little of the time between build and destruction.

So come on EU, stop messing about with some of the more ridiculous directives you are working on and come up with a directive that makes a meaningful difference, supports legitimate and professional auto recyclers, protects consumers and insurers from illegal practices, improves the quality of vehicle repairs and improves the quality of data and information captured by insurers in the event of a vehicle write-off.

The recent sentencing of a car dealer from Ilford for the sale of poorly repaired written off vehicles shows that this can still happen in the UK, and it also highlighted how serious the issues are and how the authorities are tackling this problem - you can read more about this at http://motorvehicledismantlers.blogspot.co.uk/2014/09/company-director-jailed-for-twelve.html

June 2014

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