New UK Vehicle Write-off Categories Explained
Origins of the ‘Write-off’ Category Designation
Many are familiar with the terms ‘Write-off’ or ‘Written-off’ when it comes to cars. From the expression itself, we can ascertain that this must have originally been an expression uses for accounting purposes.
The original definition of the expression ‘written-off’ or ‘to write-off’ something comes from the world of accountancy but for a long time, it has become synonymous within the motor trade as a description for a damaged vehicle.
Technically speaking though, for something to be ‘written-off’, simply means that it is an elimination of an item from a book of accounts or the reduction of a book value of an item (as by way of depreciation) and does not really have anything to do with an asset being damaged or not.
That being said, the common understanding and the most popular usage of the expression ‘written-off’ is to describe a damaged vehicle as for decades insurers have used this accountancy expression to describe a vehicle that is damaged and in most cases is ‘beyond economical repair’.
Traditional Write-off Categories
For those in the motor trade and even informed motorists, understanding the traditional Cat A,B,C and D car insurance write-off categories has got more confusing with the recently introduced new category designation system in the UK.
By now, dealers and other members of the motor trade will have made themselves aware of the new category changes and become familiar with them.
Many though may still be somewhat confused as to how to understand the new designations and may ask, ‘What do the different write-off categories mean?’
Before October 2017 in the UK, Cat C and Cat D vehicles were one of the four categories insurance companies used to classify vehicles that had suffered some kind of damage which cost more than the value of the car to repair.
A vehicle would be designated a specific category label from an insurer if they declined to repair a vehicle following an accident or other damage. These were allocated as A,B,C or D.
As one can imagine, a vehicle which has been allocated a category will then have a lower value than if it did not regardless as to the quality of repair and even if this repair was to industry standard.
The new categories were needed in order to reflect the complexity of repairs on modern vehicles. In recent times, deciding on whether a car should return to the open road has become more difficult. The new categories were specifically devised and implemented to make sure that it is the condition of the vehicle which is assessed rather than the cost of the repair which is sensible.
New UK Category Designations, A,B,S, N
Category A (unchanged) Scrap
This designation is for cars so badly damaged they should be crushed and never reappear on the road again. This includes all salvageable parts which also must be destroyed.
Category A which have been on fire or are so badly damaged in an accident that they will never be safe to go back on the road. These cars are normally crushed, and even parts of the car that could be salvaged are destroyed.
Category B (unchanged) Break
Body shell should be crushed. This signifies extensive damage to the vehicle but some parts may be salvageable. This category vehicle should never reappear on road as well, although some reclaimed parts can be used in other road-going vehicles.
Category B is nearly at the same level of Cat A, as the car's body shell must be crushed as well but parts may be removed before this happens. That includes wheels, seats and some mechanical parts, even the engine if it wasn't damaged in the accident that caused the vehicle to be written off.
Category S: Structurally damaged repairable
The new Category S means the vehicle has suffered structural damage. This could include a bent or twisted chassis or a crumple zone that has collapsed in a crash. Category S damage is more than just cosmetic, therefore, and the vehicle will need to be professionally repaired to industry standard. Also, it won’t be safe to drive until then.
Cat S vehicles can be made roadworthy again but are seen by the insurance company as uneconomical to repair because of the structural damage but when repaired these vehicles are perfectly usable on the road.
Category N: Non-structurally damaged repairable
Vehicles graded accordingly haven’t sustained structural damage, so the issue may be cosmetic, or a problem with the electrics that aren’t economical to repair. Don’t assume such vehicles are drivable, however; non-structural faults may include brakes, steering or other safety-related parts.
Cat N vehicles may have minor cosmetic damage or even have been stolen vehicles that have been recovered after the insurer has paid out the insurance claim or it could be problems such as extensive electrical problems – requiring thousands of pounds to fix. In these instances, it could mean that the vehicle has hardly a scratch on it.
What does an Insurance company do with a ‘Write-off’?
The ABI Salvage Code in the UK dictates that Category A and Category B cars should be crushed, with Cat B vehicles allowed to donate some safe and serviceable parts.
However, write-offs in C & D categories can be sold on by the insurance company, either to the original owner or to a third party via a car salvage company.
Cars written off as a Category S case in the United Kingdom must have a Form V23* submitted by the insurer to Driver and Vehicle Licensing Agency (DVLA) as soon as the categorisation decision is made and without waiting for V5. However, it is the responsibility of the keeper to notify DVLA when a vehicle is passed to an insurer following a total loss payment.
No notifications are made to the DVLA or VOSA (Vehicle and Operator Services Agency) when a car is written off in a Category N situation.
Cars in the latter two categories, S & N can sometimes represent a bargain if they are priced accordingly.
Anyone who has spent time searching for a bargain will know that these cars are normally exceptional value in comparison to cars which have not be written-off.
An older car can be repaired to an acceptable standard at a lower cost than that dictated by an insurance company’s standards – especially if used parts or cheaper labour are used.
How repair costs are calculated?
The insurer uses figures that are worked out using brand-new Original Equipment Manufacturer (OEM) parts and official workshop prices. This can inflate the cost somewhat, so there's every possibility that a Cat S or N will be easy to repair and has most likely been repaired before it's put back on sale.
Legislation means that any car that has been classified as a Cat S or Cat N write-off must have it logged with the DVLA where it can be easily checked by any potential buyer.
Should you buy a Categorised vehicle?
It may in certain circumstances be worth considering. Even if it is uneconomical for an insurer to repair the vehicle, it could be made safe and roadworthy again a lot cheaper by a private buyer. A private buyer doesn't have the jump through the same hoops as an insurer does and so if the car can pass an MoT or even if it is imported into Ireland and it can pass an NCT, then it may become a bargain.
An example of a Cat C write-off would be a car worth say, £1,000 with a dent that costs £1,200 to fix. If the car is repaired and put back on the road, a Vehicle Identity Check is required from the DVSA for the car to be taxable, and thus roadworthy. However, this test does not check if the car has been repaired properly - so if you are looking to buy one, then get a mechanic to check the car over for you first.
As an example of a Cat N (D) write-off could be as small as a dent on a ten-year-old car worth £1,000. Insurers are bound to go through official repair channels and obviously, on older cars, this can be very expensive and cost prohibitive.
For example, the manufacturer price of a new door to the insurer would be £800 and because the actual value of the car is so low, the insurer decides it's uneconomical to carry out the repair and writes the car off as the repair exceeds the value of the vehicle. However, a private buyer could very easily salvage a door from a scrap vehicle for, say, £50, and fit it themselves. The car can then be sold on, provided it's clearly noted as a Cat N write-off.
The attraction of Cat S & N cars is that while superficial damage can cost a fortune to repair through official channels, it's not impossible to get them repaired for less when not using manufacturer parts and workshops. Using a trusted independent garage, second-hand parts and even a spot of DIY can make Cat S and N vehicles a cheap way to get behind the wheel of a decent car.
The very same can be true here in Ireland when dealing with a Cat C or Cat D vehicle that can be repaired but looking into Cat C and D (and now Cat S and N) write-offs is very much a case of 'buyer beware'.
Even superficial damage can sometimes end up costing more a lot more to fix when you get beneath the surface. On the other hand, if you know what you’re doing, a Cat C or Cat D write-off can often be put back on the road without too much trouble.
If you are fairly handy and can do some of the work yourself like replacing a wing, headlamp or bumper, or you can fill and paint a dent or even know a friend who can, then Cat S and N write-offs could offer a sensible cut-price route to a higher quality car. In saying that, if you have to pay for work to be done by someone else, it probably won’t make financial sense.
Pitfalls of driving a repaired Cat C, D, N, or S car?
One of the main pitfalls of driving a category vehicle is the loss in value as these cars will always be worth less than undamaged counterparts, regardless of the repair job, expense paid or the outward condition. This should, of course, be reflected in the price if you're considering buying one of these write-offs.
It's also very important not to focus only on the obvious damage. As with any used car, there could be any manner of faults requiring expensive fixes, totally unrelated to the write-off incident.
Sometimes insurers won't want to cover a written-off car if you buy one used, but it could just be a case of finding another insurer or accepting a higher premium as these cars aren't impossible to insure.
Do make sure you are aware of the health of the vehicle before driving it - get a mechanic to check it over for you before you buy, ideally. Just because you're buying a written off car doesn't mean you have to settle for poor quality - you should make the same engine, chassis, bodywork and interior checks that you would when buying any used car.
Insurance write-off categories as they stand here in Ireland
These cars should only be scrapped or crushed and are deemed “End of Life”. There are few (if any) economically salvageable parts. The only worth is in the raw materials that are less damaged. These vehicles should never appear on the road again.
These vehicles are suitable only for spare parts and their shell should be crushed and are also deemed “End of Life”. This means that in the opinion of the insurance company it would be uneconomical to render the vehicle safe to use on the road and salvage yards are not allowed to sell the vehicle for repair. These vehicles should not appear on the road again.
Significantly less damaged than Cat A or B, yet repair costs exceed a vehicle’s pre-accident value and are deemed “Beyond Economical Repair”. These cars are fixable and are popular with car enthusiasts who wish to make a car their own and like a project. It is legally allowed to be returned to the road prior to an Engineer’s Inspection stating that the vehicle has been repaired to a safe industry standard. The majority of Insurance Companies will insist on this Engineer’s report, prior to insuring the vehicle. The Pre-Accident Value will more than likely be affected by a vehicle being a previous Category C, so ensure that you do not pay the fair market value for a vehicle Category C vehicle. We would urge extreme caution.
Category D cars where the insurer declined to repair, either on the basis of the cost of repair, other costs (e.g. car hire, delay in spare parts) or policy (e.g. water ingress, rare vehicle etc.) and are deemed “Beyond Economical Repair”. They can range from major to relatively minor repair work. It is legally allowed to be returned to the road prior to an Engineer’s Inspection stating that the vehicle has been repaired to a safe industry standard. The majority of Insurance Companies will insist on this Engineer’s report, prior to insuring the vehicle. The Pre-Accident Value will more than likely be affected by a vehicle being a previous Category D, so ensure that you do not pay the fair market value for a vehicle Category D vehicle. We would urge extreme caution.
Protect yourself against purchasing an Insurance Category designated vehicle
A MyVehicle.ie history check on a previous or current UK registration number will disclose if a vehicle has been categorised as a category A, B, C or D. Unfortunately for Irish Vehicle registration number we will only disclose Category A and B. This is because The Department of Transport do not release Category C and D data (unless a previous UK registered vehicle).
A MyVehicle.ie Irish history Check will inform you if a vehicle has ever been recorded as been damaged and the date that this happened.
We can not disclose any personal or additional information about any damage alert, but we would strongly advise that if you have already or are considering purchasing this vehicle, that you have an independent engineer report carried out on the vehicle to ensure that the vehicle has been repaired to a safe and industry standard.
MyVehicle.ie can offer a low-cost Pre-Purchase Vehicle Inspection by a highly qualified engineer assessor.