Earnings Model for Salvage Car Referrals - A Practical Guide for South Africa

Overview: what an earnings model for salvage car referrals looks like

An earnings model for salvage car referrals explains how people or businesses are paid for bringing damaged, written-off or non-running vehicles to a buyer or broker. Models vary: some pay a flat fee per accepted lead, others use a percentage of the final sale, and many combine a base fee with performance bonuses. This guide outlines typical structures, payment timing, and South Africa-specific considerations so you can choose or negotiate a fair referral arrangement.

Why a referral model matters for individuals and small fleets

Private sellers, tow operators, panel beaters and small fleet managers often encounter salvage vehicles. A clear earnings model turns those opportunities into predictable income while reducing the seller’s marketing time and administrative overhead.

Common earnings structures

• Flat fee per accepted referral - simple for single transactions and micro-leads.
• Percentage of the sale price - scales with vehicle value but requires transparency on final sale figures.
• Tiered or hybrid models - base fee plus bonus for faster conversions or higher sale prices.
• Retainer + commission - used by high-volume referrers or brokers handling multiple leads.

When to choose referral vs. direct sale or repair

Deciding between referring a salvage car and trying to sell or repair it depends on time, repair costs, and market demand. If repair estimates exceed a sensible percentage of book value or the vehicle is non-running, referring may be quicker and more cost-effective.

How the referral process typically works

1. Referrer captures vehicle details and photos and submits them to the buyer or broker.
2. Buyer evaluates the lead and issues a conditional offer or accepts the referral.
3. When the sale completes (based on your agreement), the referrer is paid according to the model - on acceptance, after collection, or on cleared payment.

Clear acceptance criteria reduce disputes: define what counts as an "accepted" lead (e.g., offer accepted by seller, documentation provided, vehicle collected). Where helpful, use an online intake form to capture standard details - make, model, year, VIN/chassis, photos, location and whether the vehicle is under finance.

For more on how specialist buyers handle damaged and non-running vehicles, see the company process overview on the About page and the dedicated Sell Non-Running Car page for intake expectations.

Repair cost vs value retained (illustrative)

Legal & paperwork considerations in South Africa

Referral work interacts with legal steps around vehicle transfer and deregistration. In South Africa, responsibility for transfer, settlement of outstanding finance and deregistration should be clear in the sale agreement. If a vehicle is under finance, the lender must be informed and paid according to the credit agreement before ownership can change. Referrers should not attempt to alter ownership documents themselves; instead clarify whether payment to the referrer is independent of final title transfer.

Payment timing and documentation

• Payment on acceptance: paid when the buyer formally accepts the referral (fast but requires trust).
• Payment on collection: paid after the buyer collects the vehicle and confirms condition.
• Payment on cleared funds: paid when the buyer’s payment to the seller has cleared - lowest dispute risk for all parties.

Whatever the trigger, document it: a short email chain or referral agreement listing the fee, payment trigger, and required documents (seller ID, proof of ownership, settlement of finance) reduces later disagreements. For practical examples of paperwork handling by buyers, consult the service explanation on the homepage and the Sell Damaged Cars page for typical admin inclusions like deregistration and towing.

Tips to maximise referral earnings

• Capture high-quality photos and accurate details: buyers convert better with clear evidence of condition and location.
• Disclose finance and accident history up front to avoid later penalties or payment holdbacks.
• Negotiate clear payment triggers and dispute resolution steps before sending leads.
• Build volume: many referrers move from flat fees to higher percentage tiers as they demonstrate consistent lead quality.
• Consider combining services (towing, storage coordination) to command a higher referral fee if you can provide value.

Damage types vs typical offer impact (general)

What happens after collection - from a referrer’s view

After a buyer collects the vehicle, the referrer should confirm the agreed payment trigger was met and follow up if payment timing is delayed. Keep records of submission timestamps, photos and correspondence so you can reconcile any disputes. For higher-value referral arrangements, agree on an escrow or third-party verification step to secure both parties.

Practical earnings examples (illustrative)

• Flat fee example: R500 paid when buyer confirms accepted lead (useful for high volume, low-touch leads).
• Percentage example: 5% of final sale value paid after funds clear (suitable when sale price varies widely).
• Hybrid example: R250 base on acceptance + 2% bonus if sale completes within 14 days.

These figures are illustrative only; actual fees should be negotiated and documented. Always state whether amounts include VAT if relevant.

Sources

• South African Revenue Service (SARS) - guidance on VAT and tax treatment for commissions and freelance income.
• The Automobile Association of South Africa (AA) - practical advice for selling or disposing of damaged vehicles.
• South African Government - transport services - official information on vehicle registration and transfer processes.

If you plan to refer salvage vehicles regularly, document your process, seek simple written agreements for each buyer relationship, and consult an accountant about declaring referral income in South Africa. Practical experience - consistent forms, quality photos and clear seller disclosures - is the most reliable way to improve conversion and earnings over time.