The following opinion piece from Copart UK’s Managing Director, Jane Pocock, recently featured in Insurance Edge.
A global buyer base is going to play an even more prominent role in ensuring our customers handle the challenges and maximise the opportunities Brexit will bring to the UK Salvage Market, with the insurers that supply it benefiting from heightened interest from foreign buyers post-Brexit.
There is plenty of evidence that sterling depreciation has already attracted more EU and overseas buyers of insurance categorised vehicles, and that interest will accelerate should the pound experience further falls in the lead up to 31 October and beyond.
The onset of Brexit has driven an increase in the number of overseas buyers registering with Copart; an average of 1100 non-UK buyers are signing up with us each month, which is up 30% year on year.
Copart’s ability to utilise their globally patented VB3 live auction technology allows us to employ artificial Intelligence and machine learning to deliver ‘best in class’ returns for their customers assets and it is this ever-evolving technology that has allowed them to access the biggest global buyer base in the industry, with customers in 113 countries, including 81 nonEU domiciles.
We have a strong presence in the UK, with 90% of our buyers registered here, but Brexit increases the importance of salvage companies like us being able to access an overseas base, because our insurer customers will benefit from the increased buying power of foreign parts procurers.
Exports of salvage vehicles will be unaffected, as Copart adheres to EU legislation for the transfer and shipping of these vehicles, and the legal requirements for exports are ring-fenced by the Basel Convention, so we have no concerns about the strength of our supply chains. This brings additional advantages to salvage businesses with a large foreign buyer base who can exploit the rise in the number of vehicles UK insurers send to salvage.
The rising costs of repair, driven by price hikes for parts and labour, and the increase in salvage returns delivered to our customers has seen an increase in volume of vehicles insurers are choosing to sell off for salvage. As a result, Copart has invested in new capacity to handle additional loss volumes, providing over 400+ acres for UK vehicle storage.
I believe the demand for used parts will continue to increase, which will boost demand for salvaged vehicles to source parts both in the UK and beyond. Experience tells us that the demand for parts and used vehicles increases during economic downturns and uncertainty, and that currency fluctuations create opportunities for both EU and non-EU buyers. Looking ahead, our buyers, especially in non-EU countries, will hold the key to maximising salvage returns for our customers.
Jane Pocock, Managing Director at Copart UK
Source: Insurance Edge