Table of Contents
Are you wondering how much damage it takes for a car to be written off in Australia? Having a car comes with the responsibility of ensuring its safety and protecting its value. When it comes to car accidents or severe damage caused by any incidents, there are cases where it declares write-off.
Understanding the write-off terms and consequences of such a vehicle is essential for vehicle owners. In Australia, A write-off is when a vehicle is determined to be too damaged or costly to repair.
Through this blog, we will dive into the concept of car write-offs, addressing the consequences, different types, calculating the damages, and the bonus tips- What you can do with the write-off car.
Understanding Car Write-Offs
A write-off refers to a vehicle that an insurance company or another authority has determined is not worth repairing due to safety concerns or cost. Usually, this happens when the vehicle’s repair cost is higher than its vehicle’s value or when the damage is too extensive to fix safely.
Write-offs can be categorised based on the severity of the damage, and this can have important effects on the owner, such as- decreased value and restrictions.
Car owners must understand what write-offs are and how they affect their vehicles to make informed decisions about repairs and insurance.
Note: For more information you can visit Owning or buying a written-off light vehicle | NSW Government If you’re in NSW, Australia.
Types of write-offs in Australia
Did you know that write-offs have different types? There are three categories of write-offs: repairable write-offs, statutory write-offs, and salvage. It’s crucial for car owners to understand the difference between these types to assess the extent of damage that can result in their vehicle write-off.
Repairable Write-Off
A repairable write-off is the minor level refers to the vehicle that has experienced damage but can be fixed and returned to a roadworthy condition.
This means that even if the vehicle has been involved in an accident or experienced any type of damage, it can still be repaired by a professional mechanic or technician.
However, before you bring that on the road, ensure it MUST pass a roadworthy inspection to make sure it’s safe and follows all the rules in NSW.
Role of Insurance Company: In some cases, insurance companies or policies may cover the cost of repairs for a repairable write-off, depending on the terms and conditions of the policy and based on certain conditions. Such as- comprehensive coverage, extent of damage, safety and roadworthiness.
For Example: Imagine a flood damaged car that is worth $20,000. Water damages the electrical systems, interior, engine, and other parts. The cost of repairs is estimated at $16,000, with a salvage value of $4,000. The total loss cost of $12,000, in this case the car will be declared a repairable write-off.
{What is Salvage Value: The salvage value is the money that could be made from selling a vehicle’s usable parts. In the above example, the salvage value is $4,000.}
Statutory Write-Off
Statutory write-off cars are considered beyond repair due to the severity of the damage, to the point where it is deemed unsafe to be repaired and back on the road.
This determination is made by government authorities or insurance companies following strict guidelines and safety regulations.
Role of Insurance Company: The insurance company does NOT COVER the repairs for statutory write-off, as it is deemed irreparable or expensive to get back to the safe condition.
For Example: Suppose your vehicle has been in an accident and got severely damaged. The insurance company inspected the vehicle and declared it statutory write-off. Which means the damage is so extensive that it’s considered unsafe or too costly to repair.
In this case, the insurance company WILL NOT COVER THE REPAIR COST because the vehicle is deemed irreparable or not worth. Instead, they will give you the settlement based on the car’s pre-accident value, minus any applicable deductibles or depreciation.
(Inshort: Structural damage, extensive fire damage, or water damage are the main examples of Statutory write-offs.)
Salvage Write-Off
Salvage write-off cars, also known as total loss or non-repairable cars, are vehicles that have sustained such severe damage and the cost of repairing the car would exceed its market value.
When a car is deemed a salvage write-off, it means that repairing it would not be a cost-effective option.
Role of Insurance Company: The insurance company often takes ownership of salvage write-off cars and probably sells them for parts, as salvage write-off to car removal companies. In the case of total loss a insurer will pay the actual cash value (ACV) to the car owner at the time of incident. They will minus any deductibles or depreciation. Also, sometimes policy holders (car owners) have options to keep the salvage vehicle by negotiating with the insurance company.
For Example: A vehicle gets severely damaged in a hailstorm, with dents all over the bodywork and broken windows. The cost of repair exceeds the vehicle’s worth. The insurance company will pay out the claim to the vehicle’s owner, and take ownership of the vehicle. Later on they can sell it as salvage write-off.
Consequences Of Having Write-Off Cars
There are consequences of having write-off cars in Australia that can vary based on the circumstances and location. If you own a write-off car, you should be aware of these consequences:
- Insurance Coverage: In some cases write-off cars aren’t covered by insurance. When the car is declared as statutory write-offs or has severe damage that has been unsafe to be on the road.
- Registration Restrictions: Once your vehicle is declared a write-off, it is deemed unsafe and restricted for back to the road. However, if you wish to repair and use it, first you must successfully pass a roadworthy inspection or any relevant test.
- Vehicle Resale Value: Write-off cars aren’t worth buying, people might not want to buy them because it’s not safe or reliable. It would be a challenge to sell it.
Though, still you’re only allowed to sell them to car removal companies like Scrap Cars Removal Sydney ™, where we handle such vehicles responsibly and ensure their disposal adheres to the strict guidelines set by the NSW Government.
(Note: Since 2011 it has been illegal to sell a repairable write-off vehicle NSW. This was introduced to curb the stolen vehicle/rebirthing market whereby vehicles are stolen, written-off, repaired, re-identified and sold on to the unsuspecting consumer.) - Parts and Repairs: Fixing write-off cars can be difficult and costly. Even sometimes, insurance companies won’t help pay for the repairs. Also, you can’t find the right parts for your vehicle and it can be expensive.
- Safety: Statutory write-off cars carry significant safety risks when repaired and returned to the road. Structural integrity may be compromised, increasing the chances of severe damage in accidents. Previous damage may affect critical safety features and damage the functionality.
Repairable write-off cars, although risky, may still have hidden damage not addressed during repairs, leading to unexpected mechanical failures while driving.
To ensure safety, strict inspections are implemented to allow only safe and roadworthy vehicles on the road in Australia.
State Regulations About Selling Write-Offs In Australia
Selling write-offs in Australia may involve several regulations by each state, however you need to know that selling statutory write-offs aren’t allowed in any of the states of Australia. Still, repairable write-offs can be sold in a few states by following the specific inspection and roadworthy test.
| State | Regulations |
| New South Wales (NSW) | Since 2011, selling Write-offs in NSW is illegal no matter the types, similarly you’re not allowed to drive except in limited circumstances. Including: Authorised Testing, Repair or Maintenance, Sold as scrap or disposal, Emergency Situations, Special Permits. For further details, please visit the government’s official website: Written-off vehicles | NSW Government |
| Victoria (VIC) | Repairable write-offs in Victoria can be sold or roadworthy. While still you need to obtain the VIV (Vehicle identity validation) certificate and roadworthy certificate. This inspection shows that damaged vehicles are safe to drive. For further details, please visit the government’s official website: Written-off vehicles : VicRoads |
| Queensland (QLD ) | In Queensland, it is legal to sell a repairable write-off vehicle without the requirement to inform potential buyers about its status. However, there are certain conditions that must be met. These vehicles must undergo an inspection to ensure they have been repaired and are safe to drive. Additionally, they need to meet roadworthy standards in order to be registered. Once registered, these vehicles are treated like any other vehicle on the road. For further details, please visit the government’s official website: Written-off vehicles | Transport and motoring | Queensland Government |
| Western Australia (WA) | In Western Australia, a repairable write-off vehicle can be made roadworthy again by adhering to three essential steps: undertaking proper repairs, successfully passing a safety inspection, and clearing a specific written-off vehicle inspection (WOVI). By following these processes, the vehicle can be returned and deemed fit for road use once more. For further details, please visit the government’s official website: Write-off a vehicle |
| South Australia (SA) | In South Australia, repairable write-offs are permitted to be driven on the road again under certain conditions. To qualify, these vehicles must pass inspection, be deemed roadworthy, and have a valid registration. Moreover, even if a vehicle obtains an unregistered vehicle permit, it can still be driven on the road if it displays a trade plate or if its purpose is to undergo repairs or inspection.’ For further details, please visit the government’s official website: SA.GOV.AU – Written off vehicles. |
| Tasmania | In Tasmania, similar to other states, repairable write-offs have the opportunity to return to the road. However, before this can happen, these vehicles must undergo a thorough inspection to ensure their safety and roadworthiness. This inspection includes a vehicle identity check. For further details, please visit the government’s official website: Vehicle inspections (AIS) – Transport Services |
Frequently Asked Questions
Q. 1. What does repairable write off mean and can you sell it?
Ans. Repairable write-off refers to the vehicle that has been costly to repair determined by the insurance company but still can be sold legally.
Q. 2. What does economic repairable write-off mean?
Ans. An economic repairable write-off means that the cost of repairing a vehicle is too high compared to its overall value, making it expensive to repair.
Q. 3. How much is a repairable write-off worth?
Ans. The worth of repairable write-off can fluctuate depending on the factors such as- vehicle’s make, model, extent of damage and market demand of salvageable parts.
Q. 4. Can a repairable write off be insured?
Ans. In most cases, a repairable write-off can be insured but the coverage may depend on the insurance company and specific circumstances of the write-off.
Q. 5. Can you sell a repairable write-off?
Ans. No! A repairable write-off cannot be sold as it has been deemed uneconomical to repair by an insurance company.
Q. 6. Do you get rego back if your car is written?
Ans. In NSW, if your car is written-off, you do not get its rego (Registration) back. The vehicle registration can be cancelled, and to get that back you need to apply for new registration.
Q. 7. How much hail damage is to write off a car?
Ans. The amount of damage caused by hail can vary based on extent of damage and specific insurance company. But if the cost to repair hail damage is more than the overall vehicle’s worth, it may be considered as Write-off.
Q. 8. How does a tax write off work?
Ans. In NSW, a tax write-off indicates the deduction of eligible expenses or losses from taxable income, resulting in a decrease in the amount of tax owed to the NSW government.