What Happens if Your Car is Written Off?

Sometimes after an accident a car is repairable, but that’s not always the case. The car may be damaged beyond repair, or an insurer may decide the cost of carrying out repairs is worth more than the insured value of the vehicle.

In either situation, the car may be written off, meaning that instead of the vehicle being repaired, the owner could receive an insurance payout.

What does it mean when a car is written off?

When a car is written off by an insurer, it means it’s damaged to the extent that it’s unsafe to drive, or uneconomical to repair.

An insurer has a legal obligation to cancel a vehicle’s registration if it deems that the car’s safety, in terms of its drivability and performance, has been compromised. This can include serious structural damage, or damage by flooding.

What happens when a car is written off?

If your vehicle is stolen and cannot be recovered, or if it sustains irreparable damage in an accident, your claim may be settled as a total loss. This situation is also commonly referred to as your vehicle being “written off”.

In such cases, your insurer will compensate you based on the agreed value specified in your policy, deducting any applicable excess and outstanding premiums for your current policy term. This sum should be enough to purchase a replacement vehicle with similar specs.

How much will I get if my car is written off?

Your ability to make a claim for a written-off car in an accident depends on the type of car insurance you possess. For example, if you only have third-party insurance, you’ll not be covered for the loss of your vehicle.

But if you have comprehensive car insurance, it usually values a vehicle at either:

• Market value: the insurer will compensate you based on their assessment of the vehicle’s market value just before the accident, minus any excess. This value is determined based on factors such as the vehicle’s age, make, model, condition, mileage and market trends.
• Agreed value: the insurer will pay up to the amount specified on your insurance policy. When taking out the insurance policy, you are able to select how much you want the vehicle to be insured for, which impacts your premiums.

Is it bad to write-off a car?

Car accidents can be an unfortunate reality of life, and often have implications for your future insurance premiums.

Your driving and claims history can affect how much you’re charged by an insurer and, depending on your insurance provider, writing off your car may cause your premiums to increase, even if you were not the driver at fault.

Can you repair a written off car?

When a vehicle is written off, its registration is cancelled. If you wish to have the vehicle repaired, before it can be re-registered for use back on the roads, it needs to be given the all clear by an entry certifier. Entry certifiers are the people who check all used cars imported from overseas before they can be driven on our roads.

The entry certifier will determine if any repairs need to be approved by a specialist repair certifier. You can find an entry certifier here.

Can you buy a car that has been written off?

Yes, you can buy a car that has been written off. Whether you decide to purchase it for its undamaged, usable parts, or to restore it to its former glory, it pays to be careful before towing it off the lot. Although a written-off vehicle will be cheaper than a road-legal car, it may end up costing more in the long run, especially if you’re planning on getting it roadworthy.

Before investing in a written-off vehicle, check its history and the reason why it has been written off. The details behind why it has been written off are often recorded in NZTA records. Additionally, take the time to get a pre-purchase inspection before you hand over any cash, so that you have as much information about the vehicle’s structural integrity as possible.

Vehicles affected by water damage, fire damage, or ones that have been written off and inadequately repaired can have myriad faults in their safety systems, such as their safety belt pre-tensioners, airbags and electrical systems.

Can you import a car that has been written off?

When you import a used vehicle, it will undergo an inspection at the border, and may be identified as structurally damaged or deteriorated. A damage flag will then be logged on the Motor Vehicle Register, and a corresponding windscreen sticker, indicating the location of the damage, will be stuck to the vehicle by the border inspector.

If your vehicle is flagged for damage at the border, it’s recommended to have it assessed by an appropriate agent, such as an entry certifier, before proceeding with any repairs.

The entry certifier will determine whether the damage flag should be removed or if the repairs require certification by a specialist repair certifier or a heavy vehicle specialist certifier. If a repair certificate is required, the damage flag will remain on record in the Motor Vehicle Register.

What happens if your car is written off with finance owing?

Even if your car is declared a total loss, the loan you took out to purchase it does not simply vanish. You will remain responsible for repaying the loan, which could prove expensive if you don’t have the appropriate insurance cover.

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About the author of this page

Bruce Pitchers is Canstar NZ’s Content Manager. An experienced finance reporter, he has three decades’ experience as a journalist and has worked for major media companies in Australia, the UK and NZ, including ACP, Are Media, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. As a freelancer, he has worked for The Australian Financial Review, the NZ Financial Markets Authority and major banks and investment companies on both sides of the Tasman.
In his role at Canstar, he has been a regular commentator in the NZ media, including on the Driven, Stuff and One Roof websites, the NZ Herald, Radio NZ, and Newstalk ZB.
Away from Canstar, Bruce creates puzzles for magazines and newspapers, including Woman’s Day and New Idea. He is also the co-author of the murder-mystery book 5 Minute Murder.