Do I need to hold a Scrap Metal Dealer’s Licence?
Yes, it is a legal requirement under the Scrap Metal Dealers Act (2013). This requires all businesses that deal with scrap metal, including motor salvage operators and vehicle dismantlers, to hold a licence.
There are two different types of licence: a site and a mobile collector’s licence, depending upon the type of business.
All applications must be made to the local council and not the environmental regulator.
Republic of Ireland
No, it is not currently a legal requirement.
When do I need to issue a Certificate of Destruction (COD) or a Notification of Destruction (NOD)?
A COD (or a NOD for motorcycles) must be issued for ALL dismantled vehicles. The COD/NOD does not relate to physically crushing a car body shell; however, it notifies DVLA that the vehicle is in the process of being destroyed and that it will no longer be used on the road.
The UK Government recommends that a COD/NOD should be issued within 7-14 days of receipt of an ELV; best practice is within seven days. Some operators issue a COD the same or next day.
The vast majority of ATFs have an electronic link with DVLA that allows instantaneous de-registration and COD generation. This allows a COD to be printed to paper or file. Once the COD is issued, there is no facility for reprinting from the DVLA website unless a PDF has been saved locally. However, the DVLA website allows each ATF to generate a list of CODs they have issued in date order – which may be useful for audit purposes if PDF copies haven’t been saved.
It is not a legal requirement to hand a COD to a customer while they wait, or to issue a COD in the customer’s name. Some ATFs issue the COD in their own names.
Republic of Ireland
A similar system is in place in Ireland, which requires ATFs to issue a COD and notify the National Vehicle and Driver File. ATFs can either issue a COD electronically or by manually on a paper form. In either case, the person depositing the vehicle should receive a printed or written copy.
As in the UK, there is no specified timescale.; however, good practice would be to issue the COD within 7-14 days of receipt of the ELV.
Can I issue a COD/NOD without a V5 registration document?
Yes, not all ELVs received at an ATF will be accompanied by a V5 document.
A COD/NOD can, and should, be issued without a V5, if the appropriate information is obtained from the vehicle. This includes the registration number and the vehicle identification number (VIN).
In all circumstances, all ELV ATFs should issue a full receipt to the vehicle seller.
All ELV ATFs are required under the Scrap Metal Dealers Act (2013) to obtain and keep relevant information to confirm the identity of the seller.
I have an exemption on my site, is this allowed?
The standard specifically excludes sites that only operate under either a U16 or T9 exemption (in England and Wales) or a paragraph 45 exemption (in Northern Ireland or Scotland). This means that all vehicle recycling sites must hold an appropriate environmental permit or waste management licence to operate as an authorised treatment facility for end-of-life vehicles.
Because some sites have developed over many years, they may also hold exemptions that do not relate to vehicle recycling. These sites are not excluded from the scheme, as long as they hold a valid permit/licence as an ATF for ELVs.
What insurance cover do I need for my site?
Employers’ Liability insurance
All companies that employ at least one person are legally required to hold Employers’ Liability Insurance (EL). The policy must provide cover for at least £5 million and come from an authorised insurer, although the standard limit provided is generally £10 million.
EL protects a company’s legal liability in the event that a member of staff is injured or suffers an illness as a result of working at the site. It covers any legal costs and compensation involved in defending the case.
This will be required if the company has any vehicles that are driven on a public highway. Businesses with more than one vehicle may hold a motor trade or fleet policy.
Public and Products Liability insurance
This is not a legal requirement but is strongly recommended. It will provide cover should a member of the public be injured, either at the ATF or through using a reclaimed part, or should damage to property occur. It should provide cover if, for example, a customer slips and hurts themselves in the car park or counter area, or injures themselves carrying a heavy part to or from their vehicle. It should also cover a business if damage is caused to a customer’s vehicle whilst in the car park or during parts fitting (e.g., tyres).
Minimum cover of £5 million is recommended.
Material Damage insurance
This covers fire and business interruption, and aims to help a business to get back on its feet should a major problem arise. Again, this type of cover is recommended.
REQUIREMENTS OF THE STANDARD
Are ATFs that sell some parts through a DIY yard allowed on the scheme?
Operators that ONLY sell parts via DIY yards do not fall within the scope of the standard, as these parts are typically untested and ungraded.
ATFs that primarily sell parts in line with the standard (i.e., they grade, remove, store and record every target part so that it is fully traceable to the donor vehicle), may also sell some parts from a DIY yard. In this instance, these vehicle recyclers may be certified. However, any parts sold to customers from the DIY yard cannot be claimed to fall within the scope of the standard and must not be sold as certified vehicle parts. The vehicle recycler must make this clear to the customer and have different terms and conditions of sale.
Why are airbags not included in the standard?
Airbags have not been included in the Standard for safety reasons. We do, however, recognise that some vehicle recyclers do sell airbags and their associated components, and it is legal to do so.
The inclusion of airbags into the Standard will be reviewed later this year.
How do I know if there is a product recall on a part?
The Standard requires vehicle recyclers to check every incoming ELV destined for dismantling to identify whether any of the parts have been subject to a recall by the manufacturer and/or Driver and Vehicle Standards Agency (Section 6.3.2). If the vehicle is destined for immediate scrap (crushing), then there is no need to check for recalls as no parts will be re-used.
There are three ways in which this requirement can be met:
- Check the vehicle’s MOT history – www.gov.uk/check-mot-history. The main downsides with this approach are that:
a. It only shows recalls that are active at the time of the search, meaning that recalls issued on previously dismantled vehicles will not be accessible; and
b. It also doesn’t identify what the recall is – only whether or not there is an outstanding recall.
Additionally, this database is not thought to be consistent with data held by the vehicle manufacturers.
- Check the Government’s recalls database – www.gov.uk/check-vehicle-recall. This allows users to either enter a vehicle’s make, model and year of manufacture, or to download a spreadsheet. The spreadsheet lists all recalls issued since 1992 and lists vehicles by VIN ranges. It is a large dataset, containing over 13 thousand listings, so it’s not particularly user friendly.
- Invest in an automated recalls management system – At present there is only one main system available: All Auto Recalls (AAR) www.autopartneredsolutions.com/allautorecallsuk. This has been developed in Australia for the UK market and work has been done to integrate the system with the Pinnacle yard management system, although this is not currently enabled. The AAR system is both proactive and reactive – dealing with recalls on vehicles previously dismantled and those about to be dismantled.
Whichever system is used, it is important to ensure it is used consistently and that evidence is retained for the certification body to check during audits.
Republic of Ireland
All product recalls are listed here: www.ccpc.ie/consumers/product-safety/product-recalls/
What do I do if I identify a recalled part?
There are a number of options depending upon the type of recall, the part and whether it has been sold or not:
- Parts that have been sold – you will need to contact your customer and advise them of the recall. The manufacturer is responsible for rectifying the problem that led to the recall, so you should advise them how to contact the manufacturer.
- Parts that have not yet been sold – these will need to be removed from your inventory and destroyed.
- Recalls that relate to an assembly issue – generally, as the parts would have been removed during dismantling, this should not affect their saleability; however, it’s always best to double check this first.
For all of these steps, it’s important to ensure that they are adequately documented and that records are kept for auditing purposes.
Why is traceability of parts so important?
It is important to trace every target part back to its donor vehicle and to the customer who bought it for a number of reasons:
- So that you can inform the customer who purchased the part if there is a subsequent safety recall (see Recalls).
- So that you can demonstrate that the donor vehicle has been acquired legally. This helps differentiate certified vehicle recyclers from other sellers of used vehicle parts that may not have been acquired or dismantled legally.
- So that you can accurately identify the specific make and model of the donor vehicle to aid matching the manufacturers’ part numbers (MPNs) and paint codes. This helps you market the parts correctly, given the wide variation in parts between and within models.
- So that you can comply with SMDA13 in recording the source of the vehicle.
What is meant by a special consideration and a hazard category?
The Standard requires vehicle recyclers to assess all risks associated with the depollution and recycling of ELVs and to introduce appropriate control measures in order to comply with relevant UK law (section 5.1.2). It also requires vehicle recyclers to check every end-of-life vehicle to identify whether it has been assigned to any particular hazard category (section 6.3.1).
When a vehicle arrives at an ATF that may present additional hazards to those typically found, this means that a risk assessment needs to be carried out and additional control measures introduced if deemed necessary.
Examples of this include:
- Flood damaged vehicles – these may be contaminated with pathogenic microbes (harmful bugs) that have the potential to infect operatives or customers. The vehicle recycler will therefore need to introduce measures to clean the vehicle (or relevant parts of it), ensure that the operatives wear appropriate personal protective equipment (PPE) and identify only those parts that can be cleaned for re-sale. Absorbent or interior parts from flood damaged vehicles generally should not be sold on, as they cannot be cleaned and sanitised sufficiently; likewise, electrical components may also be unsuitable for re-sale.
- Severely damaged vehicles where the occupants may have been hurt – in these instances, these vehicles may be contaminated with bodily fluids, needles and other medical consumables if the emergency services have attended. In these instances, the person removing the part from the vehicle may be injured or infected. Again, a risk assessment should be carried out and only those target parts not affected by the hazards sold on.
- Electric and hybrid vehicles – these need to be identified and clearly marked so that only those technicians trained to make safe and dismantle high voltage (HV) batteries and components do so using the appropriate HV tools and PPE.
SOURCING, HANDLING AND GRADING OF TARGET PARTS
Can I source target parts from other vehicle recyclers?
Vehicle Recyclers may only source target parts from other VRAC certified ATFs, as set out in Policy Statement 3 (Inclusion of Target Parts Resellers in the Certification Scheme).
In these circumstances, vehicle recyclers will need to ensure that there is an auditable chain of custody for every target part sourced from a VRAC certified third party ATF.
They will also need to retain all appropriate documentation, including full traceability of every target part to its donor vehicle as specified in the Standard and make this available for audit by the certification body.
Can I re-sell parts that are not sourced from end-of-life vehicles?
The standard and certification scheme only apply to target parts removed from end-of-life vehicles at an authorised treatment facility. Parts that are not sourced from ELVs therefore fall outside of the scope of the scheme.
However, some specialist ATFs that wish to become certified may also sell a small number of parts sourced from either forecourt dealers or directly from vehicle manufacturers (e.g., old stock). As there is potential for these parts to be acquired from disreputable and/or illegal sources, a number of safeguards must be put in place. The vehicle recycler will need to ensure that these parts are fully traceable to a reputable, bone fide seller (e.g., a registered motor dealership) and that all documentation must be retained for audit by the certification body. Target parts that are sourced from non-ELVs must not be marketed as being certified; meaning that this needs to be specified on any online platforms, including the ATF’s own website.
Can I sell reconditioned parts?
Reconditioned parts are not excluded from the Standard, but they are not specifically referenced either. Where an ATF wishes to sell reconditioned target parts, the following criteria must be met:
- The target part must come from an ELV that the certified/applicant ATF has received for dismantling; and
- There must be full traceability of the reconditioned part to the donor vehicle; and
- The part must only be reconditioned by a suitably qualified or professional re-conditioner. Records of this will need to be retained by the vehicle recycler and made available for audit by the certification body; and
- The part must be adequately described so that the customer is adequately informed (e.g., if an engine has had new piston rings, reground valves etc.); and
- These parts can only be graded as U.
Can I sell flood damaged parts?
Flood damaged vehicles may be contaminated with pathogenic microbes (harmful bugs) that have the potential to infect operatives or customers. The vehicle recycler will therefore need to introduce measures to clean the vehicle (or relevant parts of it), ensure that the operatives wear appropriate personal protective equipment (PPE) and identify only those parts that can be cleaned and tested for re-sale.
Absorbent or interior parts from flood damaged vehicles generally should not be sold on, as they cannot be cleaned and sanitised adequately.
Electrical components may also be unsuitable for re-sale as, depending upon the nature of the flood, they may not be guaranteed to function as intended.
Non-absorbent parts, such as panels, wheels and tyres, that can be cleaned, sanitised, tested and graded can be sold on.
It is also important to remember that water and sludge residues may have worked their way into hidden spaces, so extra care needs to be taken during cleaning and grading.
Can I store parts outdoors?
Yes, the standard specifies that vehicle recyclers store parts in such a manner so as to prevent damage and deterioration and to also ensure that they can be accurately located.
Many operators store parts outside, often undercover or on the cars themselves, and this shouldn’t necessarily cause a problem, as long as those parts that are prone to deterioration are properly protected; indoor storage is, however, preferable. Practically, some types of parts need to be stored indoors when removed from the vehicle, such as electrical items, interiors, lights etc. Body panels and mechanicals are OK to be stored outside as long as they are adequately protected from damage and weathering.
MARKETING TARGET PARTS
Should I sell bare or dressed target parts?
A BARE part is one that is supplied on the same basis as new original equipment by a dealer e.g., a door shell only with all non-shell components removed (e.g., glass, rubber, rubbing strips, locks, wiring etc.) or an engine as a block-head-sump without its starter motor, alternator, turbo charger etc.
A DRESSED part is one that includes some or all ancillary components (e.g., a door plus its glass, window regulator, motor, lock, handles, mouldings, trims, speaker etc.).
Business-to-business (B2B) and business-to-customer (B2C) buyers will have different requirements.
B2B: Most professional bodyshops require bare parts, as they will typically re-spray any part and re-use their customers’ original ancillary components. Stripping out any unwanted components is both time consuming for the bodyshop and costly; it also means that vehicle recyclers effectively give away the component part(s), which they may be able to sell separately. If body shops require additional parts, they will order them, and they can be invoiced accordingly.
B2C: Most domestic customers will generally require dressed parts, so that they can easily swap them with their old damaged or worn parts.
The key is to accurately describe what is being offered for sale, what is included and has been tested, and what has not) so the customer’s expectations are met. This means ensuring that the part is accurately graded, described and photographed.
What are the minimum warranty requirements?
The standard specifies that there should be a minimum warranty of:
- Twelve months for non-mechanical and non-electrical target parts such as external body panels; and
- Three months for all other parts, including mechanical, electrical, batteries and high voltage components.
This is to bring it in line with the standard warranty on new original equipment parts, against which we are competing. The warranty on a body panel relates to an inherent fault in the manufactured structure, such as corrosion (caused, for example, by substandard corrosion protection or welding faults); however, it does not extend to wear and tear of the part during use after it has been fitted. So, any stone chips or cracks caused by the owner during normal vehicle use would not be a warranty issue. If there was an issue with painting, this would be the responsibility of the repairer, not the recycler.
Why are warranties longer than the current industry standard?
The aim of the standard and certification scheme is to improve the reputation of the vehicle recycling sector as a whole and to develop new market opportunities where quality is just as important as cost.
Professional bodyshops and garages buying from certified vehicle recyclers will need assurance that the parts they purchase are of a sufficiently high quality for their customers. With some insurance companies now offering owner lifetime warranties (i.e. as long as the current owner retains the vehicle) on accident repairs, the success of using reclaimed vehicle parts by this sector will largely depend upon quality: this means supplying quality parts and delivering a quality service.
Do I need to sell through eBay to be certified?
No, certification to the standard is open to all end-of-life vehicle recyclers operating at an authorised treatment facility (ATF) and located in the UK and/or the Republic of Ireland.
The VRA standard and certification scheme is independent of eBay and any other online marketplaces or companies.
eBay is using the certification scheme as an indicator of the quality of a reclaimed parts seller, as a minimum access requirement to their B2B portal. This is because certified recyclers operate to high standards, have very high satisfaction feedback and cause the fewest problems for buyers. This is one of the advantages of being certified.