Code 3 Car Sale Disclosure - What to Tell a Buyer in South Africa

Overview: What the phrase Code 3 means for sellers

The term Code 3 frequently appears in insurer, auction or trade reports to flag vehicles with a significant incident history or salvage designation. Whether you are selling privately or via a dealer, clear disclosure reduces legal risk, builds trust and prevents disputes. This guide explains what to tell a buyer, how full disclosure works in a South African context, and practical steps to document vehicle history.

Key items to disclose immediately

• Known accident damage and the extent of structural repairs (including which panels or safety systems were replaced)
• If the vehicle was written off, salvaged, or given a Code 3/insurance category - state the insurer’s outcome if available
• Any flood or fire damage history
• Outstanding finance or bonds registered against the vehicle
• Odometer discrepancies or replaced instrument clusters
• Ongoing safety concerns or known mechanical faults that affect roadworthiness

Why full disclosure matters in South Africa

South African buyers and dealers expect transparency; withheld material facts can lead to civil claims or reputational damage. For fleet sales and business sellers, documenting disclosures protects directors and supports clean record-keeping. If you need a refresher on how a professional buyer handles damaged vehicles, our company overview explains the purchaser’s process and safeguards: About / How it works.

When to sell versus repair: practical considerations

Deciding whether to repair before sale or to disclose and sell as-is depends on repair cost, the car’s market value, and the buyer type. If repair estimates approach or exceed the vehicle’s market value, selling as-is with a clear Code 3 disclosure often yields a faster, lower-risk outcome.

These ranges are illustrative estimates for South African conditions - repair prices and value recovery vary by make, model and regional demand. If you are unsure, a quick online valuation or a trade enquiry helps. For guidance on selling damaged cars and the options buyers expect, see our page on selling damaged vehicles: Sell Damaged Cars.

How the disclosure process should work

A transparent disclosure process follows three simple steps: document, inform, and record. Prepare photographic evidence, invoices and the insurer or repairer statement (if any). Tell prospective buyers in writing and include the exact words used (for example: "previous structural repairs" or "insurance write-off advised"). Keep a dated copy of every written disclosure for your records.

Legal & paperwork considerations in South Africa

There is no single national form labelled "Code 3 disclosure" that replaces contractual honesty. Sellers must ensure they do not conceal material facts. If the vehicle has outstanding finance, the National Credit Act and your contract with the finance provider require settlement before a clear transfer of ownership. Always state whether a bond or debit exists and confirm who will settle it. For an overview of selling a non-running or written-off vehicle and how professionals handle deregistration and collection, see our Sell Non-Running Car guidance: Sell Non-Running Car.

Damage types and typical impact on offers

Tips to maximise buyer confidence (and your outcome)

• Prepare a one-page history: dates, repairs, invoices and insurer references if available.
• Be explicit about safety items that remain uncertified (for example, alignment or wheel integrity).
• Offer independent inspection results or allow a buyer-appointed inspection - a short report eases negotiations.
• Use clear, unambiguous language in written listings and emails rather than shorthand terms.

What happens after a disclosed sale

Once you and the buyer agree, document the sale in writing. Include the disclosure checklist as an annex and have both parties sign. Ensure transfer paperwork notes any outstanding finance and whether it will be cleared before registration transfer. If you prefer a trade buyer who specialises in Code 3 or salvage purchases, they typically handle towing, paperwork and deregistration - including free collection in many cases - which simplifies the handover. For a fast, managed sale option that arranges collection and handles paperwork across South Africa, consider our homepage for the service steps and immediate offers: Sell Your Damaged Car home.

Practical example (experience-based)

A Johannesburg private owner with a car flagged Code 3 supplied repair invoices and photos, disclosed outstanding finance, and attached a signed one-page history to the sale agreement. The buyer accepted a reduced offer but the transfer completed without dispute because the seller had documented everything and the finance settlement was confirmed in writing.

Sources

• Automobile Association South Africa - vehicle history and inspection advice
• National Credit Act (South Africa) - guidance on consumer credit and outstanding finance
• Road Traffic Management Corporation - registration and vehicle administration information