Rising vehicle and spares costs are driving a sharp increase in salvage auctions where garages, enthusiasts and parts merchants bid to buy vehicles at a fraction of retail cost.
While the popularity of these types of auctions is filled with opportunities for buyers it is also important to note the ins and outs of the business and to seek out trustworthy and reputable auctioneers who work within the boundaries of the law and are members of the industry’s official professional body, the South African Institute of Auctioneers (SAIA).
Gert Labuschagne, Chief Operations Officer for and long-standing member of SAIA at auction company GoBid, explains that salvage auctions focus on selling vehicles deemed uneconomical to repair by insurers. Vehicles classified as “salvage” are not necessarily beyond repair; instead, the classification often results from the combined costs of repairs, car rental, and related claim expenses exceeding the vehicle’s post-repair value. Once these vehicles are repaired to meet roadworthy standards, they may be returned to use.
Salvage auctions serve a critical role in the insurance and financial ecosystem by helping recover value from vehicles deemed uneconomical to repair and reducing fraud through regulated channels. These vehicles range from accident-damaged to repossessed and used cars and are sold “as is or voetstoots” through professional auction platforms. The vehicles are categorised either as Code 2 (used and repairable), Code 3 (rebuilt or permanently unfit motor vehicle), Code 3A (scrapped for parts only) and Code 4 (permanently demolished and not for resale).
“In tough economic times, South Africans are looking for affordable vehicle solutions and salvage auctions give buyers a chance to access vehicles well below retail prices - some in repairable condition, others ideal for parts.”
SAIA chief operations officer, Sonja Styger, adds that with the growth in popularity of salvage auctions combined with a rising number of outlets and technology platforms it is possible to find daily auctions where bidders can participate from anywhere in the country. In these instances buyers can identify the vehicles they like and arrange viewing prior to the auction and bidding. In most instances auctioneers should be able to field questions about the vehicle to ensure transparency and buyer confidence in the process.
Typical buyers range from everyday South Africans to seasoned professionals:
- Mechanics and panel beaters seeking vehicles to repair and resell
- DIY rebuilders taking on projects for personal use
- Parts dealers harvesting components for resale
- Dealers looking for competitively priced vehicles
- Fleet managers sourcing budget additions
Gert concurs adding that the online format has opened the doors for anyone from an entry-level entrepreneur to a large dealership to participate on a national scale. However, this accessibility also attracts unaccredited operators, leading to issues such as cloned vehicles, misrepresented conditions, hidden fees and other activities not in line with industry standards, all of which can result in significant costs for buyers.
That’s where SAIA’s role becomes essential. “SAIA-accredited auctioneers comply with a strict Code of Conduct, operate within all legal frameworks and provide full transparency to protect both buyers and sellers. Failure to comply with these requirements will therefore have consequences and serves as a deterrent to chancers or fly-by-night operators.”
Sonja concludes that whether a buyer is looking for a budget vehicle, a project car or a business opportunity salvage auctions offer real value. “Just be sure to deal with a SAIA-accredited auctioneer to ensure your rights and investments are protected.”
Visit www.auctioneering.co.za to find a trusted SAIA member near you and explore upcoming salvage auctions across the country.