The chances are many of us will be involved in some type of accident or bumper bashing at some stage of our motoring life and may need to take our car in for repairs.
What happens however if you don’t collect your vehicle after it has been repaired because you cannot afford the repairs or perhaps even the insurance excess? Equally what are your rights if your insurer does not pay for accident repairs to your vehicle. We have all seen recent reports of insurers going into liquidation – so where does that leave the customer?
Your Rights & The Rights of The Motor Body Repairer
Uvashen Bramiah, national director of the South African Motor Body Repairers’ Association (SAMBRA), a proud association of the Retail Motor Industry Organisation (RMI), provides some advice and clarifies the position about storage costs and when a car can be declared abandoned.
He says it is important for consumers to realise a panel shop is entitled to charge for storage fees if a vehicle is not collected after a specified time, and for the period that it remains uncollected, provided that these costs and terms are clearly stated in a contract upfront. Also, a panel shop can dispose of unclaimed vehicles after a period if the vehicle remains with a panel shop, as a result of the panel shop exercising its right of retention, or just because of the owner disappearing or not willing to collect its vehicle.
Consumers should realise the most important starting point is their contract (quote/estimate). The client will be given a detailed contract by the motor body repairer (MBR) or panel shop that they will need to sign and approve. This contract will not only deal with the cost of the repair but also cover storage costs, expenses towards courtesy vehicles and the like. It will also cover no or partial payment and determines when the MBR is entitled to regard the vehicle as abandoned and to obtain an order to dispose of the vehicle.
So now what happens in the following instances?
1. What happens if you don’t collect your car after repairs are completed?
You take your car directly to a panel shop for repair, sign the contract but when it is time to collect your vehicle you find yourself in a position where you cannot afford the repairs or the insurance excess. Can you expect your panel shop to keep the car until you can pay?
- Firstly, check your contract – what does it say about payment before the release of the vehicle, and storage costs?
- Immediately contact your MBR and discuss the problem of payment with the owner. Any accredited and reputable MBR will require that you sign an acknowledgement of debt, and draft a new contract and payment structure which can in some cases, eliminate storage costs.
- Bramiah says you need to remember the contract is a legal document, so if you default and do not approach the business, they are within their rights, after a certain period, to regard the vehicle as abandoned and to obtain a court order to dispose of the vehicle.
2. What are your rights if your insurer does not pay for accident repairs to your vehicle
Your car is insured. After your accident you lodge a claim and take your car in for repairs. Bramiah says in this instance there are two possible scenarios that can play out. Firstly, your insurance company, as was recently the case with Constantia Insurance, goes into liquidation before you collect your car and secondly, you find yourself in a position where you cannot afford the insurance excess.
- Here is what you need to do:
- If your insurer goes into liquidation, you need to immediately get in contact with your insurer/broker and carefully follow the liquidation process they set out. The onus is now firmly on the owner of the vehicle to settle any outstanding payments. A panel shop may retain the vehicle lawfully for a period equal to the time it takes the owner of the vehicle (or other property) to pay in terms of the contract. You will find you may be able to reclaim back some of these costs from the liquidator, but it will take time.
- If you cannot pay the excess on your insurance, the insurer will not pay the MBR and again, he has the right to retain your car until payment is made. We recommend you immediately get hold of the MBR to explain your situation and work out an arrangement on storage until you can pay the insurance excess.
- If no payment is forthcoming after a reasonable period of time an MBR will do the following:
a. Write a letter of demand, demanding payment, and collection of the vehicle within seven (7) days.
b. Depending on the amount claimed the matter can proceed through the courts and an attorney can be consulted to issue summons for the amount and have it served by Sheriff.
c. Depending on whether the summons is defended by the owner, a default judgment application can be brought, or in the case of a defense, a summary judgment application since such costs will form a liquidated claim based on the signed contract between the parties and the invoice delivered.
d. Depending on the route of a defended matter or undefended matter respectively, once judgment is obtained a warrant of execution can be issued and the Sheriff can be requested to attach and auction the property by way of a sale in execution. The proceeds of this may in principle cover the claim of the panel shop. If it doesn’t, the owner will remain liable for the balance outstanding.
3. What are your rights if your vehicle is owned by a bank and you can’t afford the repairs?
The final scenario is where the owner or title holder of the vehicle is a bank/financial institution.
Bramiah says in the case of a dispute on costs, it is once again important that the legal procedure is followed and there should be no deviation. The MBR has every right to follow the process outlined above, and if necessary, declare the car abandoned. There will be a point in terms of the contract when the panel shop will be entitled to regard the vehicle as abandoned and to obtain an order to dispose of the vehicle.
“With many people facing extreme financial challenges, we are seeing more and more of these cases amongst our members and we felt it important to alert consumers regarding their rights and obligations,” concludes Bramiah.