Vehicle Codes Demystified!

Whether you’ve just graduated, started that new job, or have enough money that you’ve saved up, taking the next step to buy a car doesn’t have to involve walking into a dealership. You can simply buy your vehicle at an auction.

Car auctions allow customers to access an online platform and bid on a vehicle of their choice, if they have the highest bid they drive away with a car. Traditionally, auctions were held physically/on-site but due to the disruption caused by COVID-19 and adapting to the ‘new normal’ car auctions have now moved online, giving customers the safety and comfort to buy a car through a simple ‘click’.

All types of vehicles are sold on online auctions where you can find used cars or cars with minor damage that you can fix and drive. But what do you need to know before going this route? One very important thing to know is the code of the vehicle that you’re buying.

Motor vehicles are classified according to codes that represent the status of the vehicle or the life cycle stage as defined by the National administration Traffic information system (NaTis). These codes are:

·????????Code 1 ‘New’ – This is a brand new vehicle sold by a dealer to the first owner.

·????????Code 2 ‘Used’ – These are used vehicles with one or more previous owners. Its status on the registration document is “Used”, and include:

o??Normal 2nd hand vehicles

o??Minor accident damaged vehicles that did not affect the vehicle's original structure

o??Stolen recovered

o??Bank repossessions

o??Deceased estates

·????????Code 3 ‘Built Up’ – These are code 1 or code 2 accident-damaged vehicles with major structural damages and require extensive repairs. These vehicles are considered not worth repairing by insurers as the cost of repairing would be more than the car’s value at that time. These vehicles are deregistered and the client will need to take the vehicle to SAPS for Police clearance before re-registration. Once done, the registration paper will show status as “Built-up”. Code 3 vehicles are sold for less than code 1 and code 2 vehicles.

·????????Code 3A ‘Stripping’ – These are vehicles with major accident damage which renders them “beyond repair” and are deregistered (same as code 3) but sold without registration papers to registered second-hand goods dealers who will strip them and sell them as parts.

·????????Code 4 ‘Demolished’ – These vehicles have major damage and are permanently unfit for use. These vehicles do not go on auction but are pressed as scrap metal. By law code 4 vehicles cannot be sold on auction. The registration document status is “Demolished”.

?Depending on the vehicle code, the vehicle you purchase can require little to no additional fixing or could need major work to fix and get it back on the road again. Buying a code 2 or code 3 vehicle and repairing it can help save you money as compared to buying from dealerships because you are not locked into a contract for the next 36 to 72 months. It is important to note however that although code 3 vehicles are cheaper to buy, they do require extensive repairs so make sure to do your calculations to determine what will be better suited to your budget.

Before deciding to buy a car by participating in an online auction, make sure to understand the vehicle code first. This will help determine the stage/status of the vehicle as well as help you understand the costs involved with repairing the vehicle so you can make an informed decision when making your next purchase.

If you need more information on vehicle codes or looking for your next vehicle to fix and drive, contact SMD

www.smd.co.za | [email protected] | 087 830 9999

SMD - Buy it. Fix it. Love it.