Kredo Mobility offers dealers access to vehicle accident and salvage data, with plans to widen access and datasets in future.
There has been a partial breakthrough in the drive to improve transparency around accident-damaged vehicles and prevent consumers and dealers from unknowingly buying written-off vehicles at inflated prices.
Digital solutions services company Kredo Mobility recently signed a landmark agreement granting it access to 26 years of accident and salvage data from one of South Africa’s largest vehicle auction houses.
The company’s founder and CEO, Kriben Reddy, says this dataset accounts for about 30% to 35% of the market and includes not only details of the damage, location, and date, but also images of the vehicle at the time of the incident.
“It is not a silver bullet, but it is a significant step forward, says Reddy. “When you can actually see what a car looks like after an accident, you are no longer guessing. It gives dealers and buyers a real chance to judge the damage for themselves.
“If someone wants to buy the car anyway, that is their choice. But nobody should have to make that decision in the dark,” he says.
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Reddy says Kredo Mobility had entered into a commercial agreement with the vehicle auction house and is paying for this salvage data. He says this dataset was launched last week to vehicle dealers, and Kredo Mobility has plans to give consumers access to this information in the future.
Reddy adds that the direct-to-consumer platform Kredo Mobility is developing will form part of a bigger offering to consumers.
Dealers have to register and take out a subscription to get access to Kredo Mobility’s datasets, with access to the salvage dataset sold as an additional add-on at R50 per vehicle check.
“It might be in that range to a consumer, but obviously a consumer can request a dealer to pull the data on their behalf,” he says.
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One step forward
Reddy says Kredo Mobility is in the process of trying to acquire access to vehicle salvage data “across the board.” But many of the other vehicle auction houses do a lot of work for insurance companies, which are not keen to make this information available, especially in the consumer space.
“We know this data does not cover the whole market, as it comes from one source. But it is a big step forward, especially in a space where visibility has been almost non-existent. Our goal is to bring this kind of transparency to more suppliers over time, so everyone in the market can make better decisions.
“In a country where safe, affordable mobility is not optional, people deserve to know what they are buying,” he says.
Juan Hanekom, National Director of the South African Motor Body Repairers’ Association (Sambra), believes Kredo Mobility’s initiative is by no means a perfect solution but says “it’s a step in the right direction.”
Hanekom says that currently, if a consumer wants to get a semblance of [accident-damaged vehicle] information, they have to pay between R300 and R400 for a report.
“That is not accessible to most people, especially in the second-hand market,” he says.
According to Reddy, there are more than 800 000 vehicle accidents a year. About 70% of those vehicles are not insured, while insurers write off about 100 000 vehicles a year.
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Undisclosed details
Reddy says a write-off is not always a death sentence for a vehicle and is often just a financial decision based on what an insurer is willing to pay to repair a vehicle.
However, many of these vehicles are reconditioned and resold back into the market, often without clear disclosure of their accident history, which is the real problem.
Reddy says some salvage vehicles can be safely repaired by reputable repair shops, while others have no business being back on the road.
“But without a clear record of what happened to the vehicle, even experienced dealers are often left guessing. Once insurers sell these cars to auction houses, they are either fixed up for resale or stripped for parts. Buyers rarely know the difference,” he says.
He adds that one of the key issues is how salvage vehicles are coded, with a brand-new car in South Africa classified as Code 1 and a used vehicle as Code 2. Code 3 is meant for vehicles that have been written off but could still be repaired, and Code 4 means the car is a complete loss and should be scrapped.
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Reddy says the biggest grey area is between Code 2 and Code 3 vehicles, because when a vehicle is salvaged, it will often still be listed as Code 2 as it fetches a better resale price – even if the damage technically qualifies the vehicle as Code 3.
This, he says, can result in vehicles being written off more easily by insurance companies to the detriment of the owner and many written-off cars ending up misclassified and back on the market with little to no disclosure.
He says various parties in the value chain are benefitting from this: the insurer, the party that disposes or resells it as a Code 2, and the party buying the salvaged vehicle, repairing it, and then reselling it.
“A buyer might drive off in what looks like a clean used car, unaware it was in a major crash months earlier.
“While it might pass a basic roadworthy inspection, it could have hidden structural issues, especially if it was repaired by a less reputable provider. Dealers, too, are vulnerable. Without access to reliable, detailed accident history data, they risk reputational damage and legal exposure,” he says.
The Consumer Protection Act (CPA) has added greater risk to vehicle dealerships because consumers, within six months of purchase, are able to request to return the vehicle and receive a full refund.
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Sambra has been on a drive for several years to get greater transparency about the identity of written-off vehicles in an attempt to protect dealers and consumers.
This led to the South African Insurance Association (Saia) on 1 September 2023 launching a free public access vehicle salvage database (VSD). However, this excluded vehicles designated as Code 2 uneconomical or too expensive to repair and written off by insurance companies.
Code 2 vehicles were to be added to the VSD at a later date but Saia, which represents short-term insurers in South Africa, subsequently reneged on this commitment because some of its insurance company members were opposed to making this information publicly available.
Saia said at the time that the VIN-Lookup website was established to contribute to the safety of consumers.
It said it was determined that the most critical and urgent vehicle information to make available was for Code 3 (vehicles with structural defects that require substantial rebuilding), Code 3A (can only be used for spare parts), and Code 4 (must be permanently demolished) – and this information is available on the website.
This article was republished from Moneyweb. Read the original here.
