Should I buy an insurance write-off? Cat C, Cat D, Cat S and Cat N cars explained
We explain the pros and cons of buying an insurance written-off car
When you’re looking to buy a used car, you may come across models with lower-than-average prices advertised as ‘Cat N’, ‘Cat S’, ‘Cat C’ or ‘Cat D’. These are also sometimes put under the umbrella term ‘Vcar’. The categories indicate that the cars have been written off by insurance companies for various reasons, but what exactly do they mean?
If you see any of these categorisations, it means the car has been in an accident or incident and the insurer deemed the cost to repair the damage too expensive relative to the car’s value. This means the car is ‘written off’ and the insurer then categorises the car depending on the severity of the damage.
Buying an insurance write-off isn’t always a bad idea, but there are some important things to consider before handing over your cash. For one thing, due to being marked in a write-off category, there will be some impact on the car’s value when you come to sell it.
The meaning of a written off car
When a car is involved in an accident car insurers have a choice to repair a vehicle and return it to the road using one of their approved and trusted repairers, or to not repair the vehicle.
Usually an insurer will write off a vehicle if the cost of repair exceeds 50% of the market value of the car, meaning even minor damage can result in a write-off. When this happens, the owner receives the market value of the car but doesn’t get the car back.
When the insurer decides not to repair a vehicle, it categorises the damage so anyone that purchases the vehicle in future can understand the extent of repair needed. If it is deemed the vehicle is a Category S or N (previously C or D) the vehicle can be purchased on the open market. When the car is subsequently repaired and returned to the road it will carry a categorisation of damage until it is permanently removed from the road.
Those wanting to prove their vehicle has been repaired to such a high standard that the car is not discernible from one without a record of damage also have this option. Successfully passing an advanced inspection can remove the vehicle from the ‘condition alert register’ to the ‘condition inspected’ register. It should be noted that the history of the accident does not override the previous category and it will still have a record of its previous insurance write-off, albeit not as an alert. An HPI report can show three different categories under a vehicle accident history:
- Clear - A vehicle has no history of ever being written off
- Condition alert register (VCAR) - vehicle written off with unknown quality of repair
- Condition inspected - vehicle written off with high quality repair
It is important to note that a condition inspected does not entirely remove the past accident status of the vehicle. Also this will only update an HPI report, and is not guaranteed to update other reports such as Experian.
What are Cat A and Cat B cars?
The current system of write-off categories came into force on 1 October 2017 superseding the previous system. However, Category A and B (Cat A and Cat B) classifications are still used for cars that can never be returned to the road. A condition inspection cannot be performed on these vehicles as no matter the repair carried out they will remain unlawful for road use.
Category A write-offs are judged as having such severe damage that not only are they beyond repair, but no parts may be salvaged either. Such a vehicle must be crushed and destroyed so that no component from it can be used again.
The 'B' in a Category B write-off is significant – the letter stands for 'break', which means that a car written-off under this category may be broken down for parts to be used on other cars. The car itself, though, cannot be used on the road again. In many cases, if it's financially unviable to break it for parts, the car will be treated the same way as a Category A car and crushed.
What happened to the Cat C and Cat D categories?
The next two categories were formerly known as Cat C and Cat D, both of which relate to cars that can be returned to the road if properly repaired. According to the Association of British Insurers (ABI), such write-offs are “repairable total-loss vehicles where repair costs including VAT do not exceed the vehicle's pre-accident value”. These were the two categories most likely to be encountered in used-car sales listings.
As of 1 October 2017, Category C (Cat C) has been replaced by Category S (Cat S). This is assigned to cars that have suffered structural damage significant enough that repair shouldn't be attempted on a DIY basis. The change of category name came about because the determination of category is now based on whether a repair is feasible, rather than whether it's economically viable. However, the latter will still be the focus of most insurers – they'd rather pay out on a claim than spend more money on a repair.
The former Category D (Cat D) has been replaced by Category N (Cat N). This refers to cars that haven't suffered structural damage, but some safety-critical components such as steering, brake or suspension components may require replacement. Again, if properly repaired, a Cat N car (or Cat D car) can be legally returned to the road.
A Cat S or Cat N marker can sometimes be given to cars with relatively minor damage. An older, low-value car might be written off after a light scrape in a car park, simply because the cost of processing the insurance claim exceeds the car’s value.
The amended system is intended to help inform used-car buyers if a car has previously suffered structural damage. This is becoming increasingly important as the complexity of modern cars means they may be written off because of electronic rather than structural damage which is considered beyond economical repair.
Some vehicles, including classic cars or models of special interest, can be allowed to be repaired ‘irrespective of extent of damage’, as long as it’s safe for them to return to the road.
Why buy a Cat N car or Cat S car?
Whether it makes sense to buy a Cat N or Cat S car comes down to cold economics. The insurer has made a decision that the necessary repairs are not economically viable based on profitability. After writing it off, the insurer will sell the car as salvage, usually at auction.
Cat S and Cat N cars are generally worth far less than equivalent cars that haven’t been involved in a collision, so they can look like good value. Just make sure that any accident damage has been fully repaired to the required standards. Once a car is written-off as a Cat S or Cat N, this marker is permanent, and cannot be changed. Also, Category S and Category N cars are also worth less than an equivalent car that has not been written-off, meaning you’ll get less when you come to resell it.
Cat B cars are usually bought by car breakers for their parts and scrap metal. Cat S and Cat N cars can be bought by car repairers, dealers or private individuals for repair and return to the road. If you’re thinking of buying a damaged car to repair it, you’ll need to have a good idea of the costs involved - and there might be additional unseen damage which could lead to higher costs.
If you're buying for personal use, resale profit probably isn't a factor. If a salvage vehicle holds particular interest – perhaps it's a model or specification that you've long been searching for – a repairable Cat N or Cat S car could make sense even if the cost of repair means it ends up saving you only a little money compared to an undamaged car.
Buying or selling a Cat N car or Cat S car
It’s legal to sell a Cat N or Cat S car as long as its status is declared. This declaration must be clear, even if the car has been repaired to its pre-accident condition. A car bearing any write-off marker will be worth far less than one with a 'clean' history, even if the damage was minor and fully repaired to a high standard – many buyers simply aren't comfortable with a history of damage.
Declaring a car's Cat N or Cat S status is essential, whether selling it or part-exchanging it. If you don’t, the new owner could sue you for damages.
When buying a categorised car, there is a risk of ending up with a car that has been poorly repaired, potentially making it less safe. However, finding a well-repaired example can prove to be very good value. Thorough research and inspection of a potential purchase is absolutely essential if you want to buy a categorised car.
Write-off engineer reports
We recommend having a third-party inspect any vehicle that you are looking to buy no matter its previous condition. For a car that has been previously written off this is even more important. Repairs carried out may have been done by an insurer recognised garage or may have been ‘condition inspected’ but it is still better to have a respected organisation take a look. After all, a vehicle may have been damaged five years ago and repaired impeccably, only to have been poorly treated or further damaged since.
Insuring a Cat N car or Cat S car
You should also be aware that some insurers may insist on an engineers report or inspection prior to offering to cover a vehicle. This is not a rule throughout the industry and insurers understand the marketplace for repairs well. It is even possible that the company you insure your car with may have previously written it off.
If you find a seller referring to their car as ‘condition inspected’ with the certificate and HPI report to back this claim then it is unlikely an insurance company will require further inspection.
What the law says
It is important to understand your rights when purchasing any vehicle and avoid any grey areas that may appear. If you are buying from a motor trader they must inform you of any and all information that is pertinent to the vehicle. This includes its previous status as a write-off. However, we should stress that records used across the motor trade industry are not perfect, if you find you have purchased a vehicle that is not as described your first phone call should be to the seller.
We advise you always do your own checks as the Consumer Rights Act 2015 is clear to protect you, but whereas some honest traders may immediately try and rectify any problems, others may be less willing. To avoid the potential headache and cost of pursuing a dodgy dealer, a third party check and doing your own condition report using a company like HPI can be invaluable.
Private sellers have no law stopping them from selling a previously recorded, or written-off vehicle without informing a buyer. Sellers may claim they were unaware, essentially acting without complete knowledge. However, knowingly selling a car that is not roadworthy and not informing a buyer could lead to further action against a seller, especially if it were to immediately cause death or injury. A buyer may also choose to take civil action against a seller resulting in a court case.
Cat N and S cars used to have to undergo a Vehicle Identity Check, or VIC, before being allowed back on the road. This was intended to stop criminals selling disguised write-offs to ignorant buyers, but it identified so few cars that it has since been abandoned.
Should you buy a Cat N or Cat S car?
In theory, there’s no reason why you shouldn’t consider a Cat S, Cat N, Cat D or Cat C car if it’s been properly repaired, but there are hundreds of thousands of cars on sale that haven’t been written off. Unless you’re really drawn by the lower price and can put up with potentially higher insurance and lower resale costs, we’d recommend you avoid buying a written-off car if you can.
Looking to make big savings on the used car market? Read our guide on the best used cars for under £2,000 or find out all you need to know about the best way to finance a used car and how to check if a car has outstanding finance.
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