The roads are an unpredictable place. No matter how careful you are behind the wheel, there’s no telling when your car might sustain heavy damage. That’s why, as a driver, you should prepare for the worst and know what steps you need to take if the situation does arise. If your car is damaged, you’ll need to make a claim with your insurer. In certain cases, this might lead to your car being written off by your insurer. So, what exactly does this mean for you?
We’re going to delve into the ins and outs of what happens if your car is written off, how the process works, the steps that you might need to take and much more!
Table of contents
- What is a car write-off?
- Insurance write-off categories
- How are write-offs calculated?
- How to write off a car
- Can I keep a written off car?
- What happens if I still owe money?
What is a car write-off?
When your vehicle is damaged, you’re required to get in touch with your insurance provider to make a claim. Your insurer will then carefully assess the damage to decide whether or not to write off your vehicle. If they end up making the decision to write off your car, they will offer you a payout in compensation—this will come to the sum total of your car’s current market value. Your insurer will subsequently take ownership of your vehicle and either scrap it or sell its parts.
But what exactly determines whether a car is a write-off or not? The decision hinges on the answers to two simple questions.
Is the car no longer roadworthy due to the damage it has sustained?
If you’re involved in a serious accident and your car is completely wrecked, repairs will be off the table entirely. With no way to restore your car’s roadworthiness, your insurer’s only solution will be to write it off and get it scrapped.
Would the cost of repairs supersede the current value of the car?
If you’re in a situation where your car has been damaged only on a cosmetic scale, you might assume that it’s safe from the chopping block. Unfortunately, if it’s an old model with low market value, the repairs might end up totalling more than the vehicle’s worth. In this situation, your insurer will have no choice but to write off your car.
Though it sounds relatively simple when broken down into the above questions, the process can be quite complex for insurers. It’s for this reason that car write-offs are separated into categories that break down the type of damage you’re facing and whether or not there’s anything worth saving.
Insurance write-off categories
Insurance companies use four categories from the ABI Salvage Code to determine what damage the vehicle has sustained and whether or not it can be repaired economically.
|Category||Repairing and using the vehicle|
|A||Cannot be repaired
The vehicle is so badly damaged that it should never take to the roads again. The entire vehicle needs to be scrapped—even the salvageable parts.
|B||Cannot be repaired
The body of the vehicle is badly damaged and needs to be scrapped, but other parts might be salvageable and used once more.
|S||Structural damage but can be repaired
The vehicle has significant structural damage. You’re only allowed to use the vehicle again once it’s been repaired and restored to a roadworthy condition.
|N||Non-structural damage but can be repaired
The vehicle is structurally fine, but might have some cosmetic damage. You’re allowed to use the vehicle again as long as it’s repaired and restored to a roadworthy condition.
How are write-offs calculated?
If your car falls under categories A or B, your insurance company will immediately make the decision to write off your car. If it falls into categories S or N, however, they’ll need to carefully consider how economical it would be to repair the damage. So, how will they determine this? It’s simple. They’ll look at what kind of state your car was in prior to the damage and assess what its current market value is. Once they’ve got a figure in mind, they’ll then tot up how much the repairs would cost. If the repair figure surpasses the car’s market value, then it will be written off.
Once your car has been written off, your insurer will offer you a payout figure. The amount that you get will vary depending on what your car is valued at. Additionally, your insurer will automatically take out the excess amount that you agreed to pay in the event of an accident. So, if your car is valued at £7,000 and you agreed to pay an excess of £150, you’ll get £6,850 in total.
What if I don’t agree with the decision?
If you’re starting to panic, take a deep breath. Your insurer doesn’t necessarily get the last word here. If you think that your insurer’s offer isn’t a fair estimate of your car’s current value, you don’t have to accept the payout offer. The insurer won’t technically own the car until you agree to their payout offer, so the ball is in your court if you decide to negotiate.
Bear in mind, however, that their estimation is based on your car’s current value, not the amount that you paid when you first purchased it. Cars depreciate in value over the years, so don’t be too surprised if it ends up being thousands of pounds cheaper than its original price.
If you don’t want to accept the offer right off the bat, you should have a look online to see how local dealerships are currently pricing your car. You can use this as evidence to your insurer that the payout should be higher. Similarly, if you’ve recently made modifications to your car which you think ups its value, you should let your insurer know. Though insurers are thorough in their assessments, they may very well have overlooked something. If you’re still unhappy with their calculations, you can appeal to the Financial Ombudsman Service who will advise you further.
How to write off a car
So, your car has officially been written off by your insurance provider. You’re probably now wondering: “what are my next steps?” Well, you’re lucky. You’ve not got that many hoops to jump through here. In fact, your insurer will take care of most of the heavy lifting. As soon as you’ve agreed to your car’s write-off, they’ll get your vehicle towed away and organise its scrapping. The only thing that you have to worry about is the paperwork. Before you start groaning in despair, it’s really not as bad as it sounds.
All you’ve got to do is:
- Apply to take the registration number off the vehicle if you’re keen on keeping it
- Send your vehicle logbook (V5C) to your insurer, but keep the yellow ‘sell, transfer or part-exchange your vehicle to the motor trade’ section
- Tell the DVLA that your vehicle has been written off by your insurer
|Got the memory of a goldfish? Or are you simply in the habit of ignoring paperwork in the hopes that it will vanish? Failing to notify the DVLA that your car has been written off could leave you with a £1,000 fine—so you’ll want to get on it ASAP!|
Notifying the DVLA
In case you weren’t aware, the DVLA need to stay informed whenever you buy, sell or transfer a vehicle. They view car write-offs as you selling your vehicle to your insurance provider. (This is rather accurate, as your insurer is essentially buying your vehicle in order to scrap it.) It’s not a complex process, though.
You can use the DVLA’s online write-off service from 7am to 7pm everyday. To do this, you’ll need the following information:
- Your insurance provider’s name and postcode (under the ‘provide trader details’ section)
- Your vehicle registration number
- The 11-digit reference number from the yellow ‘sell, transfer or part-exchange your vehicle to the motor trade’ section of your logbook
You need to double check that the name and address listed in your logbook are correct. If they aren’t, you’ll need to apply by post instead. If you’ve got a personalised number plate, take it off the vehicle before it’s taken away. Once you’ve taken the reference number from the yellow section of your logbook, destroy it. You do not need to send it to the DVLA. The rest of your logbook will then be sent over to your insurance provider.
If you can’t follow the online form, you can inform the DVLA by post instead. Simply fill out the yellow section of your logbook and send the perforated part to the DVLA:
If your insurance provider asks for your logbook, you’ll need to write a letter to the DVLA that includes the name of your insurer and the date that you gave them the vehicle.
What happens next?
If you applied online, you’ll receive an email confirmation. Then, the DVLA will send you a letter that confirms that you’re no longer the vehicle’s keeper. You’ll also receive a vehicle tax refund for any full months that are remaining once the DVLA receives your information.
See? Not so complicated after all!
Can I keep a written off car?
So, your insurer has written off your car. Instead of taking the payout that they’re offering, however, you want to save your car from the scrap heap and keep it for yourself. The question is, is this actually possible? Well, it all depends on the write-off category and what kind of budget you’re working with.
If you want to keep your written off car, you’ll essentially need to buy it back from your insurer. All this really means, however, is that you won’t receive the payout—though you will need to pay the excess fee. Simple, right? Well, not necessarily. You’ve got to think long and hard about whether it’s cost-effective to keep your vehicle. If it was badly damaged, it will need to undergo heavy repairs. So, if you are keen on keeping your vehicle, get an experienced mechanic to take a look at it and give you a rough estimate of repair costs. If it’s more than you can afford, you might be better off taking the payout and buying a new or used car.
What happens if I still owe money on my vehicle after it’s been written off?
Things start to get slightly more complicated if you’ve bought your car on finance and it’s subsequently been written off by your insurer. In this situation, you might find that the payout being offered by your insurer doesn’t cover your outstanding finance payments. This means that you could end up still paying for a car that you no longer have, or, you might be required to pay the remaining outstanding balance upfront.
So, is there a way to avoid either of these outcomes? Well, as mentioned earlier, you could negotiate the payout fee with your insurer. If you feel like your car is worth more, you could argue your case and end up with a slightly higher payout. You can also speak to your financial provider to see if an arrangement can be made with your outstanding loan balance. Whatever you do, however, it’s vital that you get in touch with your financial provider as soon as your car is written off.