Select Committee on Trade and Industry Minutes of Evidence

Annex 1

Assessment of Current ELV Origination and Flow to Destruction


  ELVs arise via the following routes:

(a)  As accident damaged vehicles[2]

  There are various ways in which accident damaged vehicles become ELVs:

    (i)  as the result of an insurance claim the vehicle is designated category A[3] or B by the insurer and sold on to a salvage dealer and then into the trade usually but by no means always to a licensed dismantler;

    (ii)  as the result of an insurance claim the vehicle is designated category C[4] or D by the insurer and sold on to a salvage dealer who is at liberty to sell the vehicle to anyone who wants to buy it. Although these vehicles are deemed to be repairable by the insurance company, they may be purchased not for repair but for parts (ie for dismantling);

    (iii)  as the result of the vehicle owner not having insurance cover and disposing of the vehicle rather than paying for its repair; and

    (iv)  as the result of the vehicle having been recovered from an accident but an owner is not traceable and the recoverer disposes of the vehicle to defray unpaid charges.

(b)  As MOT test failures

  The owner decides that he/she does not wish tO carry out the repairs necessary to render the vehicle suitable for use on the road (this does not mean that the necessary repairs cannot be undertaken economically).

(c)  As un-saleable part exchanges

  These vehicles are not necessarily MOT test failures but are of a similar nature ie requiring repair to make them saleable. Quite often these vehicles have been in the hands of a car trader for some time and may well have had some parts removed prior to disposal.

(d)  As vehicles sold by their last owner but not resold by the buyer

  These are vehicles that have been sold to a repairer or dealer who for whatever reason decides not to carry out the repairs necessary for their resale. Again these vehicles have usually been in the hands of the trader for some time and are likely to have had parts removed prior to their disposal.

(e)  As a vehicle abandoned by whoever last had possession of it (legally or otherwise)

  These vehicles are usually difficult to identify, the last owner or user having removed or obliterated any identification marks. The cost of dealing with these vehicles usually falls on the Local Authority as it is very rarely economic to pursue the last owner.

  As there is now often a charge for disposing of an ELV (as a result of the fall in scrap steel prices) more and more vehicles are being abandoned by owners who know that there is no mechanism by which they can be proved to have been the last owner.


(a)  Accident Damaged Vehicles

    (i)  Collection by Salvage Dealer (usually collecting from garage/bodyshop/recovery operator).

      (1)  Under insurance contract.

      (2)  On behalf of owner.

      (3)  On behalf of police.

      (4)  As vehicle for resale from other dealer.

      (5)  On behalf of fleet operator.

    (ii)  Collection by Garage/Bodyshop.

      (1)  Under insurance contract.

      (2)  On behalf of owner.

      (3)  On behalf of police.

      (4)  As vehicle for resale from other dealer. In this case it may be that it is deemed not worth while continuing with the repair, usually for economic reasons and so the vehicle becomes an ELV.

      (5)  On behalf of fleet operator.

    Often vehicles will have been delivered to the garage/bodyshop by a Recovery Operator with a view to being repaired initially. This may be the choice of an insurer (Approved Repairer) or the owner.

    (iii)  Collection by Recovery Operator.

      (1)  Under insurance contract.

      (2)  On behalf of owner.

      (3)  On behalf of police.

      (4)  As vehicle for resale from other dealer.

      (5)  On behalf of fleet operator.

      (6)  Under recovery contract (Green Flag, AA, RAC etc).

    Vehicles collected by Recovery Operators are usually stored for a short time at high cost encouraging their speedy removal to a repairer salvage dealer or dismantler on behalf of the insurance company or owner.

    (iv)  Collection by or delivery to Dismantler, Scrap Metal Processor or Shredder.

    Any of the businesses at 1, 2 and 3 above may be part of, or have a dismantling operation and any of the vehicles being disposed of as accident damaged may be delivered directly to a dismantler or scrap metal processor or in some cases direct to a shredder. Generally the scrap metal processors and the shredders will not receive high value vehicles directly.

(b)  MOT fail, Part Exchange, Last owner sale

    (i)  Collection via MOT station or garage.

    This will usually result from the vehicle having failed an MOT test being considered not worth repairing by the owner and it will be sold or given to the garage, which has arranged the test. The garage may intend to repair the vehicle but decide for whatever reason to dispose of it instead, possibly after removing some parts. Similarly part exchange and last owner sale vehicles may be collected via the garage route.

    (ii)  Collection via used car dealers.

    Used car dealers range from very large to very small and across the spectrum vehicles in this origination group may become end of life in the same way as via the MOT station/garage route.

    (iii)  Collection by or delivery to Dismantler, Scrap Metal Processor or Shredder.

    Once again some of these vehicles may go directly to an initial or final processor.

(c)  Abandoned Vehicles

    (i)  Collection via recovery operator.

    Usually this will be under contract to a Local Authority (although this may not be strictly legal since an ELV is waste under EPA 1990).

    (ii)  Collection by scrap collector.

    These are one man operators (often itinerant and probably without a waste carriers license) who will collect and deliver scrap vehicles to either initial or final processors providing there is a reasonable return, ie the scrap steel price is sufficiently high.

    (iii)  Collection by dismantler or scrap metal processor.

    Generally abandoned vehicles are collected under contract by licensed dismantlers although occasionally this may be done by a scrap metal processor.


(a)  Dismantler/Used Parts Specialist

  A traditional dismantler deals in older low value vehicles recovering some reusable parts but mainly recovering materials of value particularly metals. With the advent of insurance categorisation of vehicles and the development of salvage auctions many dismantlers have become used parts specialists buying only late model vehicles for their parts although still selling recovered materials.

  Some used parts specialists have set up in recent years operating in a completely new way, focussing exclusively on the sale of parts, operating from enclosed premises and using the latest selling technologies (computers, call centres, mail order, internet etc). Whilst the vehicles being dismantled by the used parts specialists are very high value they constitute waste under current legislation, having been discarded by insurance companies for dismantling only. Having dismantled a vehicle the used parts specialist may pass it on to a traditional dismantler who will process it for its material content.

  Both types of dismantler may dispose of the vehicle remains to a scrap processor or directly to a shredder.

(b)  Scrap metal processor

  Here vehicles are accepted in any condition and are viewed purely as scrap metal they are processed together with other metals to provide feed for shredders. There is no attempt to dismantle or de-pollute these vehicles.



  This is the ultimate destination for all end of live vehicles although they will in most cases no longer be vehicles at this stage having been compressed in various ways to provide a more dense and so economic load. Of course some vehicles do arrive complete at shredder plans where any available scrap metal is voraciously consumed.

2   The vast majority of accident damaged vehicles are disposed of as a result of insurance claims. There is no standard route for disposal some insurers use contracted salvage dealers (some of whom operate salvage auctions) some use approved buyers and some use the newly developing internet auctions. These vehicles make up about 200-300,000 ELVs per year. Back

3   Insurance companies categories vehicles as A or B if for commercial reasons they wish the vehicle to be destroyed and not returned to the road usually but by no means always this is because of the degree of damage sustained. Back

4   Insurance companies categories vehicles C or D if they feel that it is commercially acceptable for the vehicle to be repaired and returned to the road. Back

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Prepared 6 December 2001