Lack of access to the complete history of a vehicle from Cradle to Grave is hindering efforts by industry players to establish transparency and disclosure in the market and open the doors to a safer mobility solution which meets the needs of all stakeholders and builds confidence within the greater automotive value chain.
The Need for a Vehicle Salvage Database (VSD)
For years the South African Motor Body Repairer’s Association (SAMBRA), a proud association of the Retail Motor Industry Organisation, has been lobbying for an open and transparent Vehicle Salvage Database (VSD), to be made available to not only the public, but all stakeholders including dealers, banks and insurers. “We are concerned that efforts to resolve the problem are only focusing on one element of the value chain. Efforts should be focused closer to the source so informed decisions can be made and a full life history of a vehicle can be checked.
Adding legislation to define and legislate the Code status of vehicles which can then be uploaded and housed on the existing electronic national traffic information system (eNaTIS) is potentially the only way to manage the historical record of a vehicle and open up this information to the entire car parc and not just the 30% insured segment of the vehicle population,” says Dev Moodley Chairman of SAMBRA.
Chris Prinsloo, an independent specialist, says as soon as a vehicle comes off the assembly line and is wholesaled to a dealer, a record needs to be kept. And that spans across the retail chain so further down the line any new purchaser or financier or insurer will have access to the information, including the accident history, to accurately value the vehicle and prevent previously written off, and potentially unsafe, vehicles finding their way back onto the market.
The current Vin Look-up Tool, created by the South African Insurance Association (SAIA) is a good start but without all vehicle data, is as effective as it could otherwise be, nor are the eNaTIS records complete. Moodley points out that the critical problem facing South African consumers and motor body repairers (MBR’s) is that cars that are still classified as Used (Code 2) on the eNaTIS documentation can certainly have been severely accident damaged or declared uneconomical to repair, or “written-off” as commonly referred to. “We can see that there is a common thread occurring. Most of these vehicles end up on online sales portals and are sold to unsuspecting consumers,” he says.
He says there is a distinct opportunity to pivot and look what is working best around the world.
Learning from International Best Practices
Brandon Cohen, national chairperson of the National Automobile Dealers’ Association (NADA), agrees saying industry, in its welcome to the new Minister of Transport, Ms Creecy, flighted the idea of legislating the Codes and believes this is the most effective avenue to encourage real progress in this critical area of consumer safety. From an implementation perspective, one could even look at following the UK model where the vehicle codes are legislated (from new to used to insurance write-offs to irreparable vehicles). Write-off categories are also legislated for vehicles, for example:
• A code A cannot be repaired, and the entire vehicle needs to be crushed.
• A code B cannot be repaired. The body shell has to be crushed but you can salvage other parts
• A code N where the vehicle can be repaired following non-structural damage so you can use the vehicle again provided it is repaired to a roadworthy condition.
The Benefits of a Comprehensive Vehicle History
Not only is this approach transparent but it will ensure information is available at the at the correct time to the relevant body in the value chain – whether that be a bank, insurer, motor body repairer, dealer and/or end customer. ‘It will prevent the current scenario where written off cars that have been poorly repaired, are being refinanced and re-insured in many cases and consumers are ultimately being sold these vehicles without the correct information,” says Moodley.
Consumers will be the biggest beneficiaries of the proposed approach that is relatively easy and cost effective to implement. As Cohen points out ‘the infrastructure is already there, we just need to legislate the codes.’
South Africans will finally have access to vehicles with the appropriate history allowing transparent asset and km validation. From a trade perspective it opens up the opportunity for insurance companies and banks to expand their offering to include “approved” code 3 vehicles that have been safely repaired. Further along the value chain it also positively impacts repairers, vehicle testers, parts suppliers and vehicle maintenance workshops.
Over the next couple of months, it is envisaged more robust conversation will be held to discuss this approach with all relevant stakeholders.
