Damaged vehicles – disaster advice

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Consumer Affairs Victoria can help if you need to repair, buy or sell a vehicle that was damaged in a disaster, such as a storm, flood, bushfire or earthquake.

Repairs

Before you employ a mechanic to do repair work:

  • contact your insurer first, to check your policy and find out whether the work is covered and if there are any restrictions on who can do the work 
  • ask around for suitable mechanics 
  • check their credentials 
  • get quotes 
  • do not pay in full up front 
  • avoid mechanics who give only mobile numbers and first names. You may not be able to contact them if there is a problem.

Insurance

Car insurance policies often have special conditions about making a claim. Check what the consequences will be if you claim on your policy, for example:

Excess payments on a claim

This depends on your insurance policy. Most policies require you to pay an excess when you make a claim, and you may need to pay this as a lump sum. If you cannot pay a lump sum, check to see if you can arrange to pay it by instalments.

'No claim' bonus

If you make a claim, you may have to pay more for insurance next year. Check with your insurer about the circumstances in which you will lose your 'no claim' bonus.

If the amount of your claim is small, it might be worth considering not making a claim and bearing the cost yourself, if you can afford to do so.

Value of vehicle

Your policy may say that the insurer only has to pay the 'market value' of your car rather than a specific figure.

The market value is determined by:

  • examining the condition of your car, and 
  • assessing the going rate for that make and model of car.

If you and the insurer cannot agree on the amount to be paid, you can take your complaint to the general dispute resolution scheme, the Financial Ombudsman Service (FOS).

For more information about insurance, contact the Australian Securities and Investments Commission (ASIC).

Buying damaged vehicles

Dealers may discount vehicles damaged in this disaster – but there are specific rights and risks when you buy this type of vehicle.

New cars

If you are buying a new car damaged in this disaster at a discount price, the trader must inform you about the extent of the damage.

However, once the trader informs you of the reason for the discounted price, you decide at your own risk whether to buy the car.

You should check the status of the manufacturer’s warranty with the trader, to determine any limits to the warranty before buying.

Used cars – licensed motor car trader sales

When the repair costs are more than the damaged vehicle’s market value, the insurer may classify the car as a ‘repairable write-off’.

If you are buying a used car, check the Victorian Written-off Vehicles Register. Call VicRoads on 13 11 71 or visit the VicRoads website.

If you buy a car that has been ‘written off’ due to damage and is unregistered, you must make all necessary repairs to make the car roadworthy. Research the repair costs – they may exceed the savings you make buying at a discount.

You are still protected by the three-month statutory warranty, for vehicles that are less than 10 years old or have been driven less than 160,000km. However, check whether the trader has excluded any defects covered by the warranty.

Private sales

There is a higher risk when you buy a damaged car in a private sale. Vehicles sold privately may be uninsured or unroadworthy and are not sold with a statutory warranty.

Underlying costs

While cosmetic damage does not necessarily affect the car’s mechanical function, it can affect resale value if unrepaired.