Car write-offs hit motor industry

CHANGES to laws concerning cars written off by insurance companies have cost Hugh Loy more than $24,000 since they came into effect on January 31.

The Grafton Wreckers owner said in that time the “ridiculous new law” would have cost the local motor industry hundreds of thousands of dollars.

And millions statewide.

The laws, aimed at increasing vehicle safety and protecting consumers, and also designed to reduce the risk of vehicle theft and stop car re-birthing, were introduced by the former Keneally government.

Under the laws, vehicles written off in NSW are classified as statutory write-offs and listed on the written-off vehicle register.

This means they cannot be re-registered in Australia and can only be used for parts or scrap metal.

Mr Loy said prior to the laws coming into effect he sold hundreds of repairable written-off vehicles in the past 35 years.

“My bills on parts for a month for repaired vehicles I would buy off the local dealers would be $20,000 to $30,000. Now it’s absolutely nothing,” he said.

“That’s all money out of the local economy for windscreens, panels, batteries.”

Before the laws were introduced, Mr Loy said he employed three people to repair written-off vehicles.

When the laws came into effect he had to put off those workers.

“I would say it has halved my business income,” he said. “I would have sold four to six cars a month.”

Despite claims by the RTA that “re-birthed vehicles are usually poorly repaired and can be a safety risk”, Mr Loy said every repairable write-off had to be approved to RTA standards.

He said the RTA visited his business as recently as last week checking on repairable write-offs he had rebuilt prior to the law coming into effect, one of three visits in the past six months.

Ultimately, Mr Loy said the law was going to drive up the cost of insurance policies as perfectly safe cars just went to waste.

“The government is losing out on this law as fewer vehicles are getting registered,” he said. “For a society that says we must recycle, it’s just ridiculous.”

After years of buying cars at auction to repair, Mr Loy said when the law was introduced insurance companies selling the vehicles at auction took a massive hit as prices plummeted.

This, he says, will be reflected in insurance premiums across the State as insurers try to recoup their losses.

“Cars that you used to buy as a repairer at auction for $2500 are now selling for $200,” he said.

“I used to pay around $20,000 for a Landcruiser that was repairable – now they are selling for $5000.”

“So it’s costing the insurance companies more money, and you know who will have to pay for that.”

Roads Minister Duncan Gay has ordered a review into the legislation surrounding the written-off vehicle register.

A representative for Mr Gay said the review would investigate if changes allowing owners to keep and safely repair their vehicles were possible.

The RTA has written off more than 10,700 vehicles since February 1.

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