Should I Buy A Repairable Write-Off | Wangara Tyres

Purchasing a brand-new car can often be costly, leading to the option of buying a used vehicle instead. Used cars offer lower prices while maintaining a reasonable level of quality, presenting a wide range of choices for consumers in the market for their next vehicle.

Among these choices are cars labelled as “repairable write-offs,” which are vehicles that have undergone significant damage but can still be repaired. While these vehicles are often priced much lower than their non-write-off counterparts, the question arises: are they worth buying?

Let’s delve deeper into this topic to find out.

2 Types of Write Off Car

To better understand repairable write-offs, it’s essential to differentiate them from statutory write-offs. While both categories involve vehicles deemed unfit for road use, there are distinct variations between them.

A. Repairable Write Off: Salvaging Value from Damage

A repairable write-off is a vehicle that has suffered damage and is too expensive to repair by insurance companies. When the cost of repairing a vehicle exceeds its market value, it is classified as a repairable write-off.

Many RWOs end up being sold at damaged vehicle auctions, where owners may purchase and repair them before undergoing a written-off vehicle inspection. Once the repaired vehicle is deemed roadworthy, it can be re-registered and sold.

However, it’s important to note that repairable write-offs are registered with the WOVR meaning Written-Off Vehicle Register, indicating their status.

Repairable write-offs can stem from various scenarios, not solely severe accidents. Vehicles can be labelled as economic write-offs due to factors such as hail damage from a storm, scratches and dents caused by vandalism or theft, as well as damage resulting from floods, fires, or collisions. The severity of damage required to declare a vehicle a repairable write-off can vary by state.

B. Statutory Write Off: Beyond Repair and Unfit for the Road

A statutory write off denotes a vehicle that has sustained damage that cannot be repaired to a safe standard for road use. These vehicles are registered as statutory write offs, with their vehicle identification numbers (VINs) recorded.

A statutory write off car cannot be registered in any state and is only suitable for use as parts or scrap metal by metal recycler. They result from incidents involving saltwater exposure, prolonged freshwater submersion above the dashboard level, or severe damage.

Statutory write offs are considered total losses, rendering them irreparable. Only undamaged parts can be salvaged and used by a wrecker for repairs of other vehicles. The registration of these vehicles is cancelled, and their VINs cannot be reused. Statutory write offs are exclusively sold for parts to metal recycler or at auction. These regulations apply nationwide.

Repairable vs. Statutory Write Offs

To further clarify the distinction between repairable and statutory write-offs, let’s examine their characteristics:

Repairable Write-Offs: Potential for Restoration

A repairable write-off is a vehicle whose combined salvage value and repair costs exceed its market value. Car written off meaning is that these vehicles can be repaired and made roadworthy once they meet the manufacturer’s standards.

However, a thorough inspection by a government inspector, a roadworthiness check, and a vehicle identity validation are mandatory. It’s important to note that a repairable write-off will carry a permanent record of its status on the registration.

Statutory Write Offs: Beyond Repair & Unusable

In contrast to repairable write-offs, statutory write offs refer to vehicles that have suffered severe structural damage rendering them unsafe for road use. These vehicles are recorded as statutory write-offs, and their registration is cancelled and used by a wrecker.

Statutory write offs cannot be re-registered and their Vehicle Identification Numbers (VINs) cannot be reused. They are only suitable for use as parts or scrap by metal recycler. Regulations for statutory write-offs apply throughout Australia.

Clarifying Statutory Write Off: Extensive Damage

Statutory write offs encompass vehicles that have undergone significant damage to the roof, floor pan, or firewall, or have experienced major engine failure. Cars exposed to saltwater, or freshwater above the dashboard for a prolonged period, or those that have been completely burnt or stripped of interior parts also fall into this category. These vehicles are beyond repair and can only be used to salvage undamaged parts.

Repairable Write-Offs: What You Need to Know

During your search for a used car, you might come across vehicles labelled as “repairable write-offs.” These vehicles have been designated as such by insurance companies, who determine that the cost of repairs exceeds the car’s market value when combined with its salvage value. It’s worth noting that the definition of a repairable write-off can vary among different states in Australia. For example, in NSW, a repairable write-off must have no non-repairable damage.

A repairable write-off is typically assigned to a car when an incident renders the cost of repairing it higher than its value. Although these vehicles are often priced significantly lower than their non-repairable write-off counterparts, the question remains: Are they worth the investment? Let’s delve deeper into what you should consider.

What makes a car a write-off in Australia?

Why Do Vehicles Get Written Off?

There are several situations in which a vehicle may be labelled as a repairable write-off. It does not necessarily indicate that the car has been involved in a severe accident.

Vehicles can be written off due to various reasons, including:

1. Accidents: Serious collisions that result in significant damage may render a vehicle unfit for road use, leading to it being written off.
2. Natural disasters: Events such as storms, floods, fires, or other catastrophic occurrences can cause extensive damage to a vehicle, warranting its classification as a write-off.
3. Theft and vandalism: Vehicles that have been stolen and recovered with substantial damage or those subjected to intentional vandalism may be deemed write-offs.

Uneven Repair Standards & Regulations

The repair standards and regulations for repairable write-offs vary between different states. In Victoria, for instance, repairs must be performed using genuine manufacturers’ parts and comply with strict standards. After repairs, the vehicle must undergo a Vehicle Identity Validation (VIV) before it can be registered and sold.

A record indicating that the car was a repairable write-off will be noted on its registration. Before purchasing a car, a PPSR report can be obtained at a small cost, revealing information about theft records, outstanding finance, and whether the vehicle is a repairable write-off.

Exercising Caution: Quality of Repairs Varies

When considering a repairable write-off it is crucial to exercise extreme caution. While these cars are affordable and come with a Certificate of Compliance issued by a licensed repairer, the quality of repairs can still vary. It is important to choose a reputable repairer who meets the required standards.

Hidden Gems: Minimal Damage at Bargain Prices

There are instances when purchasing a repairable write-off can be a smart move, even when there is damage involved. Some of these vehicles may have minimal and are priced well below the market value. This provides an opportunity to acquire an affordable vehicle without compromising its safety and reliability.

Aging Cars: Costly Repairs and Low Market Value

For older vehicles, even minor damage can lead to repair costs exceeding the car’s total value. If a car’s repair costs reach 50-70% of its market worth, insurers declare it a write-off. To regain registration, the vehicle must be repaired to meet the manufacturer’s standards.

Higher Insurance Premiums

Even if a repairable write-off is deemed fit for repairs, Insurance companies are aware of write-off status, including repairable write-offs. This results in slightly higher insurance premiums due to the previous damage.

This lead to expensive repairs in the event of another accident. The Vehicle Identification Number (VIN) is listed on the WOVR meaning Written-Off Vehicle Register, affecting insurance premiums.

Proceed with Caution

Considering a repairable write-off? Our advice would be to tread carefully. The lower price tag is appealing, it is crucial to understand the negatives associated with such a purchase.

Pros of Buying RWO

While not the best choice for everyone, there are some advantages to purchasing a repairable write-off:

1. Low prices: Repairable write-offs offer a cost-effective option for those looking for a vehicle at a lower price point.
2. Potential to find a reliable vehicle: With careful inspection and repair work, it is possible to restore a repairable write-off to a reliable condition.
3. Avoid finance interest charges: Purchasing a repairable write-off outright can help you avoid financing and interest charges.
4. Easy purchasing process: Repairable write-offs are commonly sold at auctions, simplifying the buying process without the need for negotiation with salespeople.

Cons of Buying RWO

Before purchasing a repairable write-off, it is crucial to consider the following disadvantages:

1. Damages cost more than the vehicle’s value: Repairing severe damages can often exceed the worth of the vehicle, resulting in a financial setback.
2. Inability to test the vehicle before auction: Buyers typically cannot test drive or thoroughly examine a repairable write-off before purchasing at an auction.
3. Uncertainty about the extent of the damage: The true condition and hidden issues of a repairable write-off may only become apparent after purchase, leading to unexpected complications.
4. High chance of financial loss: Due to the potential for unforeseen repair costs and limited resale value, there is a high risk of experiencing financial loss.
5. Difficulty in selling: Buyers may perceive repaired vehicles as having lower quality, making it more challenging to sell a repaired write-off in the future.
6. Safety concerns: Repairable write-offs may raise safety concerns, as the extent and quality of repairs may vary, potentially compromising the vehicle’s overall safety.

Can You Buy a Written-Off Vehicle?

Yes, it is possible to buy a vehicle that has been declared a repairable write-off. It’s important to note that the laws regarding the purchase of repairable write-offs may vary by state.

When considering buying a repairable write-off, two key factors to consider are:

1. Insurance Availability
2. Financing Options

Can You Finance A Written-Off Vehicle In Australia?

Yes, it is possible to finance a written-off vehicle in Australia. The financing options available may include both secured and unsecured loans.

However, the terms and conditions and the eligibility criteria vary depending on the lender and your circumstances. It is advisable to explore your options.

Insurance & Finance When Your Car Is Written-Off

1. Understand the Loan Condition: If your car is written off while it’s still under finance, it is typically a requirement from your financier that you pay off the remaining loan amount.
2. Insurer’s Decision: Once your vehicle is declared written off, your insurer has the option to pay your financier directly rather than providing the payment to you directly.
3. Potential Shortfall: There might be a shortfall between the amount the insurer pays and the remaining loan balance. This occurs when the insurer assesses the market value of the vehicle to be less than what you owe on the loan.

• Motor Equity Insurance:

To mitigate the potential shortfall, you can opt for ‘motor equity insurance.’ This type of policy covers the difference between the insurer’s payout and the remaining loan amount.

• Insuring for Agreed Value:

Some insurers offer the option to insure your car for an ‘agreed value.’ This means you can set the agreed value equal to the loan amount, ensuring that any payout covers the outstanding loan balance.

4. Consider Depreciation: It’s important to note that insurers use various methods, including depreciation, to assess a car’s market value. Depreciation plays a significant role in determining the amount the insurer is willing to pay.
5. Evaluate Your Options: If your vehicle is financed, it’s crucial to explore these insurance options to safeguard yourself from potential financial loss if your car is written off.

What if I buy a Repairable Write-Off (currently registered)?

Buying an RWO isn’t a problem, but it’s important to understand the factors that affect its value and potential risks. They are stated as follows:

1. Regulatory Checks and Re-registration: Before an RWO hits the road again, it undergoes strict regulatory inspections. These checks ensure the vehicle meets safety standards. The RWO you’re considering should have undergone scrutiny.
2. Value of an RWO: RWO generally sells for a lower price compared to non-accident vehicles. Therefore, when negotiating an RWO purchase, buyers should consider this and adjust their expectations accordingly.
3. Price Considerations: Understanding pricing dynamics helps buyers make informed decisions and ensure a fair deal. Take into account the vehicle’s condition, repair history, and other factors that may influence the final price.

Can I Buy a Repairable Write-Off and Re-register It?

Repairable Write-Offs (RWOs) can be considered for repair and re-registration in specific cases, as determined by Roads and Maritime Services (RMS).

To qualify, the vehicle must have no non-repairable damage and fall into one of the exempt categories. If you receive authorization to repair the vehicle, it must be restored following the manufacturer’s guidelines or recognized industry standards.

A. Repair Process and Inspections

• Once the repairs are completed, you will be provided with a Certificate of Compliance, certifying that the vehicle meets the required standards.
• Subsequently, you must have the vehicle inspected at an Authorised Unregistered Vehicle Inspection Station (AUVIS) for identity and safety checks.
• Additionally, the RMS Vehicle Identification Inspection Unit (VIIU) will conduct an inspection.

B. Registration Application

• It is advisable to retain all documentation related to the repair process, such as invoices and receipts for parts. These records will serve as supporting evidence when applying for registration.

Note: The information provided is based on the policies and procedures set by the RMS and is subject to change.

How Can I Find Out If A Vehicle Is A Repairable Write Off (RWO)?

Verifying RWO Status

Before buying a car, it is crucial to conduct checks to ensure its reliability. Especially, if it has been classified as a Repairable Write Off car  (RWO). While a car may appear in good condition, its hidden history can pose potential risks. There are reliable methods to discover reality.

1. Personal Property Securities Register (PPSR): By obtaining a PPSR report, which costs as low as $2, you can ascertain if a car is listed as written off or stolen. Simply provide the vehicle’s VIN, and the report will provide detailed information.
2. Rebirthing and Stolen Cars: Expensive stolen cars often go through a process called ‘rebirthing,’ involving extensive damage, stripping, and subsequent re-identification under a new identity. Unfortunately, the PPSR does not reveal whether a car has been rebirthed. This is where the WOVR QLD becomes valuable.
3. Checking WOVR: WOVR is a reliable method to find a vehicle’s past. Acquiring an iRego History Report for $37 offers the vehicle’s insurance claim history, stolen/write off car records, valuation, and rego details.

[Note: WOVR QLD Report only covers cars 15 years or younger]

4. Contact Your Insurer: Reach out to your insurance company and inquire about the assessment of your automobile. They should be able to provide you with relevant information regarding the write-off status.
5. Sellers’ Lack of Transparency: Sellers often conceal such information, resorting to various deceptive tactics. In more deceitful cases, sellers may attempt to unlawfully sell a “statutory write-off” that is deemed unfit for road use and destined for scrap.

Can You Insure A Repairable Write Off In Australia?

Yes, it is possible to insure a repairable write-off car in Australia. However, insurance companies may charge higher premiums for such vehicles or have specific conditions for providing coverage.

Additionally, the process of re-registering the vehicle and meeting state-specific requirements may be necessary before obtaining insurance. It is recommended to check with insurance providers for their policies regarding repairable write-offs.

How To Insure A Written Off Vehicle?

To insure a written-off vehicle, follow these steps:

1. Research insurance options: Find insurance companies that offer coverage for written-off vehicles.
2. Obtain a roadworthy certificate: Ensure the vehicle obtains the necessary certificate. The process may vary by state.
3. Disclose existing damage: Inform the insurer about any pre-existing damage to the vehicle.
4. Choose the appropriate insurance coverage: Select the insurance policy that meets your needs, considering factors like comprehensive coverage, liability limits, and deductible amounts.
5. Provide required documentation: Submit all necessary documents, including the roadworthy certificate, vehicle registration, and identification proof, as requested by the insurer.
6. Pay premiums: Pay the insurance premiums on time to maintain coverage for the written-off vehicle.

Should You Buy a Repairable Write Off?

• Repairable write-offs offer no significant advantages beyond a low price.
• Most repairable write-offs are not suitable as primary vehicles due to extensive damage.
• Potential drawbacks include costly repairs, uncertainty, financial loss, and safety concerns.
• Costly damages outweigh vehicle value. Repair costs for write-offs often exceed the vehicle’s worth.
• Compromised structural integrity poses risks to both driver and passengers.

How Is The Write-Off Value In Australia Calculated?

In Australia, the calculation of write-off value for a vehicle typically involves the following factors:

1. Market Value: Insurers consider the current market value of the vehicle. This is the amount the vehicle would fetch if sold in its pre-damaged condition.
2. Repair Costs: The estimated cost of repairs needed to restore the vehicle is taken into account. This includes both parts and labour expenses.
3. Salvage Value: The value of the vehicle sold for parts or scrap metal. This is the amount that can be obtained by selling the remaining usable components of the damaged vehicle.
4. Threshold Value: Insurance companies have a threshold value, often set at around 50% of the vehicle’s market value. If the repair costs exceed this threshold, the vehicle is more likely to be written off.
5. Safety Considerations: The structural damage and potential safety risks are evaluated. If the repairs cannot ensure a safe and reliable vehicle, it may be written off.

By considering these factors, insurance companies in Australia determine the write-off value of a vehicle, which ultimately determines whether it will be repaired or written off as a total loss.

Bottom Line

Buying a secondhand car requires careful consideration, and a repairable write-off adds complications. Despite their attractive price, a repairable write-off is a vehicle that comes with lower quality, ongoing issues, and costly repairs.

It’s advisable to seek an alternative, but if set on buying one, perform thorough checks and negotiate a good price. Remember that repairing such vehicles often costs more than buying a new car. If wondering about the value of a repairable write-off in Australia, this guide aims to address your queries.