Buying a Repaired Write-off

Dodgy used cars cost Australians more than half a billion dollars every year.

It’s big business.

So here’s how to sidestep ‘rebirthing’ and other used used car sales scams - by making sure you don’t unwittingly drive away in a repaired write-off.

This report is inspired by Stephen, who contacted me via the website: He’s thinking of buying a 2014 Kia Rio that’s a repaired write-off - effectively 40 per cent below fair market value for the equivalent used car. So: it’s above board - but is it a good idea?

A repaired write off is the six million dollar man of used cars. Only it’s not better, stronger or faster. The best you can hope for is that it’s almost as good, and a lot cheaper. So here’s how to make sure you get what you actually pay for.

Related: Should I buy a dealer demonstrator? >>

What is a repairable write-off?

Repairable write-offs happen when insurance companies declare a vehicle uneconomical to repair. This might be following a crash, or some other insurance event like a flood, or severe hail. The owner cops a cash payout or a new replacement vehicle - whatever the policy stipulates - and the wreck is generally sold at auction.

Depending on how crappy the condition, that wreck might go to a wrecker - who strips it and sells the parts. But if it’s only partly crappy it might end up repaired, inspected, re-registered and re-sold. 

Because YouTube is a global platform, and I live in Australia (the perfect environment for the descendent of a British bread-stealing criminal) you should be aware I can only comment on the repairable write-off situation down here, where the coriolis acceleration of the earth turns hurricanes into cyclones by forcing them to rotate in the other direction.

Related: Do we need tougher lemon laws? >>

Buying a repaired write-off

Nothing is intrinsically wrong with repaired write-offs, provided the repairs are done to a professional standard. But I wouldn’t be paying the full freight for one. I’d want a discount for the abuse it’s suffered in the past. It's only fair.

There are scumbags out there, with the underlying ethics of a death adder, who routinely attempt to pass off these repaired write-offs as run-of-the-mill used cars - at the full market price. So you have to protect yourself from inheriting one of these without the appropriate discount. We’ll get to that.

In Australia, there are essentially two categories of written-off cars: Repairable write-offs and statutory write-offs. Statutory write-offs are the ones that, by law, must never be repaired. They’re usually badly damaged, and they can only be sold legally for spare parts. (Although there is an even lower class of bottom-feeding scumbag who will repair and attempt sell you a statutory write-off, purporting to be a high-quality used car.)

NSW, repaired write-offs & stolen car 're-birthing'

Here in NSW, which is where Sydney is (if you're reading this from overseas) the state government made it illegal in 2011 to re-register any repaired write-off. Here, they can only be scrapped and sold for parts. That was done in an attempt to reduce re-birthing.

If you haven’t yet got your PhD from Criminal University, re-birthing is where you steal a car, you park it somewhere unobtrusive and then you buy a wreck of the same make and model. Then you transfer the wreck’s identity to the stolen car and attempt to sell it as if it’s above-board. Whole new identity. Jason Bourne … without Treadstone. Re-birthing is just like the automotive equivalent of cloning … if it were the Armenian mob doing the science … as opposed to actual geneticists.

This set of ‘zero tolerance’ write-off repair rules only applies to NSW. Other Australian states still allow you to repair and re-register repairable write-offs. There’s even an official inspection process to get them re-registered and back on the road. But the unique laws in NSW mean legally repaired and re-registered write-offs from other states can’t be transferred to a NSW registration. So bad luck if you plan on moving here with one of those.

How to protect yourself

Most people buying a used car in Australia do a REVS check, which reveals financial encumberance. It’s bad to buy a vehicle used as the security over a car loan - because it can be repossessed if the loan isn’t discharged with the sale proceeds. But a REVS check won’t identify repaired write-offs.

In Australia there’s an official Written-off Vehicle Register. And the best way for you to access the data on that register is to drop $37 online and get an official Car History Report. In addition to the financial liability check from REVS, a Car History Report will also give you the vehicle’s full insurance claim history, it’ll tell you if it’s ever been stolen or written off, you’ll also get a valuation and the registration details, plus a bunch of other sundry information. It could just be the best $37 insurance policy of all time.

Online rescources: REVS -Vs- CarHistory

Above, left to right: REVS check (L) and Car History check (R) - Carhistory tells you about written-off and insurance issues in a car's past; REVs doesn't

To get a Car History Report, you’ll need the vehicle’s VIN code - a 17-digit alpha-numeric code (effectively a serial number) located on an official plate in the engine bay or inside the door frame. You should also check that the code on this plate matches the code on the rego papers exactly. So, when you’re inspecting a used car, bring a flashlight and a rag with you - because engine numbers are sometimes dirty and sometimes hard to see deep in the engine bay - but it’s worth the effort making sure the physical VIN code and engine number match the ones on the registration paperwork.

Related: How to test drive like a pro >>

Nobody who watched this movie would ever mess with your mechanic

Nobody who watched this movie would ever mess with your mechanic

Your mechanic can help

The other thing you really should do, no matter where you live on Earth, is get your own trusted, independent mechanic to inspect the car - not only for its mechanical health, but also for evidence of major repair work. Especially dodgy crash repair - which is easy to spot if you know what to look for. Flood damage is another common cause of repaired write-offs - and that leaves telltales that a trained mechanic will spot … in addition to a ‘high tide’ mark halfway up the doors, and water under the carpet in the footwells.

Related: How to tell if a mechanic is ripping you off >>

Insurance & warranty

If you buy a repaired write-off, you need to tell your insurance company that’s what it is. It’s part of your duty of disclosure to tell the insurer anything that materially affects their decision to insure you. The final thing you need to do is clarify the vehicle’s warranty status with the manufacturer. This is especially important for reasonably new cars, like the 2014 Rio that Stephen’s sniffing around, which sparked this report - don’t just presume the balance of the factory warranty protects you because you might find that the factory warranty is null and void as a consequence of being written off.

Related: More detail on used cars & warranties >>


Finally: should you buy a repaired write off - even if it’s legal, and above-board? If everyone could afford a new car, used cars would be stacked 100 high at the junkyard. And if everyone could afford a late-model used car, nobody would ever repair a write-off. The fact is, they exist because there’s a market. Just don’t kid yourself they’re as good as a car that’s never been written off. Crash repaired cars tend to rust, flood damaged cars are prone to mechanical problems. Severe damage is hard to fix. You get what you pay for.

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