Eyes on NSW write-off laws

NSW has legislated to make repairable write-offs illegal. Now the other states are watching to see what affect these laws will have, and whether similar laws should be introduced. Tim Byrne reports..State organisations representing the body repair industry are coming together in a push to have repairable write-off laws rolled out across the nation.

NSW legislation came into effect on 31 January this year, pushed by the Motor Traders’ Association of NSW and backed by the state government, which was looking to crack down on car theft and address safety concerns with backyard repairs.

Now the Motor Trades Association of Queensland (MTAQ) has called on its government to review legislation regarding written-off vehicles in the state.

The call for the review has become more urgent following the devastating floods in Queensland and the potential for written-off cars to be sold at auction to private buyers and find their way back onto the roads.

MTAQ principal policy director Richard Payne has written to Queensland transport minister Rachel Nolan and Premier Anna Bligh, detailing the association’s position on repairable write-offs

“We have been banging on about this for 15 months and still haven’t got a clear direction from the government,” Payne told AP&P.

In his letter, Payne said MTAQ has “written to you on three occasions since September 2009 regarding the treatment of written-off vehicles, strongly advocating that all vehicles assessed as a total loss should be declared as “statutory” write-offs, as legislated in NSW.

“The current legislation in Queensland permitting ‘repairable’ write-offs to be auctioned on the open market has been, and still is, a major concern to us as many are bought by backyard operators and there is no control on the quality of workmanship allowing for these vehicles to be re-registered and put back on the road.

“The vast majority of these are sold into the private market without openly declaring that they have been written-off.”

He wrote that the situation was exacerbated by the recent floods with MTAQ members witnessing the first batch of flood-damaged vehicles being offered at auction.

“There are many thousands to go over the ensuing weeks and we are deeply concerned for the longer term effects on electronics and other components from being submerged in water,” he said.

“Again, we urgently call on the Queensland government to review legislation and practices relating to written-off vehicles as there potentially are thousands of flood- damaged vehicles likely to be sold into the private market without any declaration whatsoever, as is required by licensed dealers (reference 294 A of the Property Agents and Motor Dealers Act 2000 ).”

The Victorian Automobile Chamber of Commerce (VACC) supports the one category of written-off vehicles. VACC executive director David Purchase told AP&P that in the absence of the RWO system, it is likely insurers would repair more vehicles. Vehicles that are written-off are generally sold only for the recycling of parts, thus making those parts cheaper for recyclers and end users.

The implementation of the one category of written-off vehicle would lead to the substantial management and recording process currently used for RWOs being no longer necessary, he said.

“One category of written-off vehicle would remove the current position of having two classes of vehicles in the second-hand market; those that have been written-off and those which have not,” Purchase said.

“VACC would like to see the NSW position adopted in Victoria.”

In South Australia, the MTA-SA is watching the effects of the NSW legislation on both the collision repair and recycling industries.

At the Auto Parts Recyclers Association of Australia annual general meeting, all states were in agreement that any effect on  the recycling industry would not become clear for at least 90 to 120 days after its introduction on January 31, 2011.

MTA-SA executive director John Chapman said that at this early stage of the regulation’s introduction, not all effects are clear.

“We believe that the insurance industry will see a reduction in their recoveries on vehicles presented at auction houses, as the backyarder will no longer seek to pay large prices for repairable vehicles which cannot be re-registered,” Chapman said.

“If this is the case, the collision industry in NSW will possibly see an increase in larger repairs which will need better equipped and trained workshops to handle such vehicles.

“And if this becomes a reality under the new regulations, the auto parts recycling industry would only need to compete against each other rather than backyarders, who drive the price of stock upwards to unrealistic levels.”