Hidden risks lurk in SA’s used car market

South Africa sees more than 800,000 vehicle accidents a year. Around 70% of those vehicles are not insured. This leaves hundreds of thousands of motorists to navigate the fallout with no safety net.

Out of this chaos, approximately 100,000 vehicles are written off by insurers every year. And yet, most South Africans have very little visibility into what that actually means.

Of course, a write-off is not always a death sentence for a car. Often, it is just a financial decision based on what an insurer is willing to pay to repair a vehicle. Many of these vehicles find their way back into the market, resold and reconditioned, often without clear disclosure of their accident history. That’s the real problem.

Not all salvage vehicles are equal. Some salvage cars can be safely repaired by reputable repair shops; 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.

A coding dilemma

One of the key issues lies in how salvage vehicles are coded. In SA, a new car is classified as Code 1 and a used one 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. Simple enough, except it is not.

The biggest grey area is between Code 2 and Code 3. That is where things get murky. When a vehicle is salvaged, it will often be kept listed as Code 2 because it fetches a better resale price, even if the damage technically qualifies it as Code 3. The result? Many written-off cars end up misclassified and back on the market with little to no disclosure. 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.

Lack of visibility

To complicate matters further, the data ecosystem in SA is fragmented. One widely used supplier provides basic information such as the date of an incident and the general area of damage (e.g., front left or rear). While helpful, this only paints part of the picture. It doesn’t tell you how severe the damage was, who repaired the vehicle, or what the repair entailed.

At Kredo, we recently signed a landmark agreement granting us access to 26 years of accident and salvage data from one of SA’s largest vehicle auction houses. This dataset includes not just the damage location or date, but also images of the vehicle at the time of the incident. It is not a silver bullet; there is no such thing in this space. However, it is a significant step forward.

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.

A step forward

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. If the industry is not willing to offer that kind of honesty, then the data has to.