Law change to cost insurers money?

New legislation could cut salvage income for insurers by as much as £18m, Universal Salvage has warned.

The legislation is aimed at tackling the ringing and cloning of vehicles.

The Vehicle Identity Check (VIC) Scheme, which is due to become operative next spring, will make it a legal requirement for category C vehicles to be inspected before they are allowed back on the road.

Universal Salvage estimates that approximately £100 will be lost from the value of each category C sold as purchasers have to pay to take their cars to one of several new inspection stations before a V5 form can be issued.

Chief executive Martin Hynes said: "The VIC Scheme will make dubious practices more difficult and is a good thing, but the knock on effect on the industry cannot be underestimated.

"Among the implications we also expect to see resell values hit as vehicles will be stigmatised."