Who pays for Car Salvage

CuppaTLager

Hi first time here... 

I had a no-fault claim with my car insurance to which my vehicle was passed to an accident management company that took my vehicle away.

Without my knowledge they assessed the vehicle as a category N write off and pursued the 3rd party's insurance for payment. I was told the 3rd party paid the car assessment price (lets say £2000) minus the salvage value (lets say £300). IE £2700. 

I then subsequently received the salvage of the vehicle of £300.

My question is... has the accident management skimmed off the savage into their own pockets... IE should I receive:
the assessment of the car (£2000) plus the salvage (£300) = £2300
OR 
the assessment of the car (£2000) minus the salvage (£300) = £1700 plus the salvage (£300) = £2000?

To date I have not received  all the payments owed to me but they have already sold the car on to a third party.

Thanks

Car_54

You're entitled to the value of the car before the accident (£2,000).

The £300 salvage is the value after the accident, and at that point the car is no longer yours..

CuppaTLager

Thanks Car_54...

Just so I understand you. Are you saying that the final figure I should receive is £2000 + £300 (TOTAL: £2300).

The behaviour I'm seeing is they received £2000 from the 3rd party. Took off the £300 and paid me £1700 and then paid me the £300 salvage a week later. IE I paid for the salvage out of the pre accident value of the vehicle..

Arunmor

If the car was cheaply repairable what you should have done is take the £2,000, pay the salvage value £300 to retain the car and have the car repaired hopefully leaving you up say £700-£1,000.  The knack in doing these deals is ensuring the insurer or management company don't get hold of your car.

Car_54

CuppaTLager said:

Thanks Car_54...

Just so I understand you. Are you saying that the final figure I should receive is £2000 + £300 (TOTAL: £2300).

No. I'm saying that if the car was worth £2,000 before the crash that's what you should get.

The car then belongs to the insurer. What they sell it for (£300) is theirs, and nothing to do with you.

DullGreyGuy

Your car was worth £2,000

What's left of your car is worth £300 to a scrap merchant

You either give up the car and get £2,000, the insurer sells to a scrap merchant and gets £300 back

Alternatively you keep the car and get £1,700 (£2,000 for the car but you pay them £300 to keep the salvage, claim is settled on a net basis). 

Occasionally the AMC will deal with the salvage so the TPI pays you £1,700 and the AMC pays you the £300

In all cases you get the value of £2k, just how much is cash and how much is stuff varies depending on the who gets the salvage

CuppaTLager

 DullGreyGuy said:

Alternatively you keep the car and get £1,700 (£2,000 for the car but you pay them £300 to keep the salvage, claim is settled on a net basis). 

This is what has happened... except I haven't kept the car... the AMC has sold it on. No doubt for a healthy profit. 

The accident report stated... "not be practical to consider cost effective temporary repairs" but the car has been sold on and seen on the road. All this before I have been paid out. 

Thoughts?

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CuppaTLager said:

 DullGreyGuy said:

Alternatively you keep the car and get £1,700 (£2,000 for the car but you pay them £300 to keep the salvage, claim is settled on a net basis). 

This is what has happened... except I haven't kept the car... the AMC has sold it on. No doubt for a healthy profit. 

The accident report stated... "not be practical to consider cost effective temporary repairs" but the car has been sold on and seen on the road. All this before I have been paid out. 

Thoughts?

You had a car deemed to be worth £2000.

You now have £2000.

You are deemed to be put back in the position that you were before the accident (except we all know that you are not really, if you wanted £2000 cash you'd have sold the car, you actually wanted the car and you will never get a like-for-like replacement on the road for £2000)

That is it for you.

Your car was categorised as CAT N, which means that when it is repaired it will sell for about £1500.

The salvage yard bought it for £300.

They probably sold it on for £500, so they paid £40 VAT and made £160, which isn't much when you take out their collection cost.

Whoever bought it then repaired it by sourcing second hand parts/hitting it with a hammer until it was straight/painting it and sold it for £1500. So they paid £200 VAT (if they are a business, nothing if they are a driveway trader masquerading as a Private seller), less any VAT they could claim back on the parts (if their supplier was VAT registered). Their profit is £1000 -£200 -parts & paint -labour cost - transport charges

So best case scenario, HMRC have made £240 for doing nothing. Everyone else in the chain has done something to make money and keep people in work (more for HMRC in tax & N.I. + VAT on whatever they buy with their money....

If you hadn't dealt with an accident management company you could have bought the car back for £300, got £1700 payout and fixed it yourself.

 

DullGreyGuy

CuppaTLager said:

 DullGreyGuy said:
Alternatively you keep the car and get £1,700 (£2,000 for the car but you pay them £300 to keep the salvage, claim is settled on a net basis). 

This is what has happened... except I haven't kept the car... the AMC has sold it on. No doubt for a healthy profit. 

The accident report stated... "not be practical to consider cost effective temporary repairs" but the car has been sold on and seen on the road. All this before I have been paid out. 

Thoughts?

No it's not what's happened, it's the paragraph immediately below thats happened where the AMC has dealt with the salvage so you get a total of £2k from a combination of the TPI and the AMC. 

15% for salvage is fairly average, you in theory can get more by more complex arrangements but thats offset by the higher operational costs and time/value of money often says £300 today is better than £400 in six months for which you have to pay £95 in costs to get. 

CuppaTLager

I suppose what will clear this up for me is what happens if the assessment for the car (£2000) was done outside my house. 

Am I not then entitled to the £2000 assessment of the vehicle?

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CuppaTLager said:

I suppose what will clear this up for me is what happens if the assessment for the car (£2000) was done outside my house. 

Am I not then entitled to the £2000 assessment of the vehicle?

Yes, and you have received £2000. 

£1700 + the £300 you received from the salvage yard = £2000.