Salvage Code of Practice 12 months on Nick Farrell Copart UK What - - PowerPoint PPT Presentation

Salvage Code of Practice

12 months on

Nick Farrell Copart UK

What we thought we would see

No change to straight to Salvage model

• An obvious total loss has remained as such

Some Salvage Buyer uncertainty

• Extensive marketing campaign to our Buyers helped mitigate this, but we still fielded lots of

enquiries after go live We would begin to understand the shift in categories and values towards the end of January 2018

• Wasn’t fully implemented by all credit hire companies due to…..

Cat C and D vehicles would be more attractive to Buyers as the new COP got near and after go live

• This proved to be the case and continues today.

We expected to see first vehicle on the new categories to be sold in the first few weeks

• A vehicle sold under the new categories during the first week of new COP implementation

What we thought we would see

Category Mix There would be a shift in Structural vehicles being newer and of higher value than Non Structural Proportionately more Non Structural vehicles would emerge from existing Cat C and D categories

• We found this to be the case

Engineering 1 in 4 cases would require more information/a physical inspection Engineers would possibly err on the side of caution when categorising

• 27.4 % benefit from an inspection, of those 16.5% changed from S to N

The shift from old to new COP

Cars and LCVs

1.46% 14.05% 44.04% 25.57% 14.34% 0.54% CAT A CAT B CAT C CAT D CAT U CAT X

Pre COP – CAT mix

1.46% 14.05% 14.34% 0.54% 1.13% 16.45% 26.92% 32.38% 13.36% 0.78% CAT A CAT B CAT S CAT N CAT U CAT X

Post COP - CAT Mix

Pre COP Post COP

• Engineers err on the side of caution around category B vehicles
• More equal distribution on N & S’s compared to C & D’s

The shift from old to new COP

MotorBikes

7.05% 21.54% 46.45% 20.15% 3.95% 0.86% CAT A CAT B CAT C CAT D CAT U CAT X

Pre COP - CAT Mix

7.05% 21.54% 3.95% 0.86% 6.66% 36.73% 37.24% 3.32% 0.88% CAT A CAT B CAT N CAT U CAT X

Post COP - CAT Mix

Pre COP Post COP

• Significant increase in category B as no option for category S
• Repairable propositions being moved to category B

• Many of our customers have taken the opportunity to change their processes

and factor in all the effects of a total loss journey

• We are seeing vehicle returns at auction featuring more in the repair or TL

process

• Complexity of repair
• Parts availability
• Vehicle mobility costs
• Policy Holder experience
• Our customers don’t just see it as salvage, they see and understand the overall

value that can be delivered

A Shift in thinking?

Examples of a different approach

1,000 2,000 3,000 4,000 5,000 6,000 7,000 7.4 7.6 7.8 8 8.2 8.4 8.6 8.8 9 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18

Average PAV & Age - Structural

Average Age at Sale Average PAV

Summary

• There still remains confusion and inconsistencies
• Cold repair to Structurally damaged vehicles
• ELV’s
• Classic cars/cars of special interest
• Physical Inspections are required for accurate Categorisation and to avoid loss of value
• Motorbikes, bikes with similar damage to some Cat B’s are being repaired through

Networks

• Copart Buyers have adapted well, do Consumers understand?
• When is the review happening, what influence will the Industry have?