Code 2 vs Code 3 cars: What’s the real difference?
Everybody loves a used-car bargain, but buying cheap today often translates to buying dear tomorrow. Both Code 2 and Code 3 cars denote used status in South Africa, yet that one digit difference could mean getting it road-worthied, financed and insured – or not. This is what you need to know.
As if all the vehicular acronyms you need to familiarise yourself with aren’t overwhelming enough already before going used-car tyre-kicking, the two most essential ones are often only considered when the time comes to sign on the dotted line. Or worse, when it’s too late. In used-car jargon, the phrases “Code 2” and “Code 3” are the two fundamentals all shoppers should know. But what do they mean; where do they come from; and how do they affect your purchase decision?
Read more: Should I buy a car from a dealer or a private seller?
The national Electronic National Administration Traffic Information System (e-NaTIS) database is the equivalent of Home Affairs for every South African car, keeping records of its VIN and engine numbers, owner details and, crucially, its status code. Whenever a car is sold, crashed or stolen, that status is updated.
Used cars are always classified as Code 2 or Code 3. Notwithstanding the fundamental differences between the two, there are also subtle distinctions within those definitions.
What is the difference between between the codes?
Briefly, Code 2 is a standard used vehicle; Code 3 is built-up.
Regardless of its age, as soon as a vehicle changes owner, it becomes a Code 2, which is industry-speak for a used vehicle. Code 3 is assigned to accident or flood-damaged vehicles that have been rebuilt, put through police clearance and road-worthied.
| Status code | Official description | What it means for you |
| Code 1 | New | Brand new, first owner |
| Code 2 | Used | Typical second-hand car |
| Code 3 | Built-up | Previously written off |
| Code 4 | Scrapped | Permanently demolished; cannot be put back on the road |
Read more: How to buy a used car from a private seller
Under what circumstances are vehicles written off?
Vehicles are usually written off by the insurer for these reasons:
- The cost of restoring a structurally damaged car (think bent chassis or compromised safety structures) to its original safety standard exceeds its value. The owner is paid out and the salvage wreck sold at an auction. The next owner revives it and can only sell it as a Code 3.
- A car may also be deemed non-viable for repair if it is hail or flood damaged; or where the bodyshell is intact, yet the cost of repair to the bodywork or ECU damage and other associated electric glitches loom as future risks.
- When cars are stolen and recovered in a stripped state, and the cost of repair exceeds its value.
Is buying a Code 3 vehicle worth the risk? The pros & cons
Here’s where balancing common sense with reality gets tricky.
For incurable bargain-hunters, the headline news is that Code 3s hold only 50% to 70% of their market value and are therefore much cheaper than their unviolated equivalents. However, in 99.9% of the cases, owing to the uncertainty over the extent of an undead vehicle’s crash history, along with its forever-tainted DNA, a Code 3 should be a no-brainer no-go.
That said, a hail-damaged Code 3 is a much safer bet than a front-smashed Code 2 that has been privately repaired. To that point, any Code 2 could, of course, have previously suffered accident damage and indeed be deemed as cosmetically “unrepairworthy” by the insurer – yet still be sold as a Code 2.
The challenges of insuring and financing a Code 3 car
As the credit industry revolves around risk, trying to finance and insure a Code 3 car is where the rubber of all those saved cents hits the potholed-road.
As opposed to Code 2s, which are bread-and-butter deals for banks and underwriters, the latter institutions are extremely unlikely to extend the same courtesy towards written-off vehicles.
Read more: Top tips for financing a car: A comprehensive guide for South Africans
A handful of insurers may provide some form of cover, albeit at an significantly reduced market value.
If financial assistance is a must-have to clinch the deal, your next best bet would be a personal loan. As these credit extensions are often unsecured (with no collateral for the bank to repossess in the case of payment defaults), the interest rate will be much higher than conventional vehicle finance.
| Code 2 | Code 3 | |
| e-NaTIS classification | Second-hand | Built-up / Rebuilt |
| Vehicle history | No structural write-off | Previously declared a write-off |
| Market value | 100% | 50-70% |
| Finance available | Yes | In most cases, no |
| Insurance available | Yes | Limited or high premium |
How to check a car’s history: Avoiding Code 3 scams
If you still simply can’t reach that Code 3 itch to scratch, there’s good news and bad news.
Curious but cautious tyre-kickers can do a VIN lookup on the South African Insurance Association’s vehicle salvage database website (www.vinlookupsa.co.za) to establish if a vehicle has been registered as a Code 3.
While free, it’s far from foolproof. And that’s because less than a 3rd of all South African vehicles are insured: if a wreck is sold privately and repaired, it may be sold as a Code 2 because no insurance company was involved to register it as a Code 3.
Read more: Avoid car scams in South Africa
In addition, insurers may occasionally write off a car as “uneconomical to repair” while retaining its Code 2 status when it is sent to the salvage yard. The VIN lookup algorithm focuses on Code 3, Code 3A (blacklisted for any road use; spares only) and Code 4s (crushed), while ignoring Code 2 write-offs.
The database also isn’t maintained in real-time. Input delays may result in false positives if a VIN lookup is requested too soon after a vehicle has been written off.
Read more: How to register and license your car
Suspect odo tampering?
Far greater peace of mind can be had – at a cost – when using paid services like FirstCheck and Transunion that provides insights into a vehicle’s accident history, finance status (if it has been repossessed), stolen status, market value and mileage check. The latter is updated at every dealer-conducted service, insurance claim, financing event and roadworthy test. This is useful to evaluate odometer tampering.
As for mileage, never just trust the dashboard reading. Your deep-level search may reveal a car listed as having 90 000 km on the clock (often the case with German executives whose comprehensive maintenance plans are set to expire at 100 000 km) yet may have been quoted for repairs at 120 000 km.
Read more: How depreciation affects the value of a car
Of course, as with any other black market activity, however thorough in collecting the digital breadcrumbs, the system cannot track cash transactions and backyard repairs of any vehicle, be it a Code 1, Code 2 or Code 3.
Ultimately, buying a Code 3 means buying a car with a documented past; buying a Code 2 demands you trust a story that hasn’t been challenged yet. One is a gamble you can see coming, the other is a trap that stays unrevealed until you try to insure it.
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