Reporter of every business: Dong Tianyi
A city, after the rain, there are extreme joys and sorrows.
Walking on the streets of Zhengzhou, all kinds of vehicles lined up on the side of the road, with doors and windows basking in the sun - their cars were all soaked in the heavy rain not long ago, and they had to take advantage of this rare and good weather to dry the water in the car clean.
The water truck is drying on the street. (Picture source: Photo provided by the interviewee)
"The rain was too heavy at that time. The water was poured into the community's basement and could not stop it. After a while, the car parked on the second floor of the minus was flooded. The water accumulated on the first floor of the minus was 1 meter deep." Wang Yong's family is located in , Jinshui District, , and is one of the urban areas that suffered severe heavy rainstorms in Zhengzhou. Wang Yong told the reporter of " Daily Economic News " that there are many communities with similar situations in Zhengzhou, and there are more water-soaked trucks.
Wang Yong’s basement, water is being pumped out. (Photo source: Photo provided by the interviewee)
"The streets were filled with small car collection advertisements from my colleagues over the first two weeks. Now the water truck has basically been processed almost all, so I have to take my luck in collecting cars." Zhang Chi is a second-hand car dealer in Zhengzhou City, Henan Province. After the heavy rain in Zhengzhou area, he "collected more than 80 water trucks in three days" and benefited a lot.
Zhang Chi said in an interview with a reporter from "Daily Economic News": "When second-hand car dealers purchase water soaking trucks, the purchase price is mainly given based on the degree of water soaking of the car. Among them, the 'full car' is charged at 30% off for the normal second-hand car price, and the 'semi-sized car' is charged at 60% off for the 60% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off for the 20% off. The specific price must also be determined based on the model, year and degree of damage."
Recently, there are accident car auction platforms that resonate with the 20% off for the 20% off. As the main recipient of insurance companies' "full loss vehicles", some auction platforms have held dozens of special auctions of "Henan Water Soaking Trucks" in recent days. Most water-soaked trucks that have been identified as "full loss" or " presumed total loss " are accelerating their flow to the market through buyers across the country, which also makes some consumers panic about purchasing used cars.
"As long as the repair can meet the requirements of the regulations and comply with relevant laws during the transaction process, water-soaking trucks are actually not scary." Deputy Secretary-General of of China Automobile Dealers Association told reporters that water-soaking trucks have always occupied a certain share in the used car market. Although there are not many, there is also market demand. I hope consumers will not "demonize" them.
Wu Feng, member of the Expert Committee of the China Automobile Dealers Association and partner of Langcheng Law Firm, told reporters that if the seller subjectively intentionally informs the other party of false information, or deliberately conceals the true situation and induces the other party to make a wrong expression of intention, the consumer has the right to require the seller to "refund one and compensate three" on the grounds that the seller constitutes fraud.
water-soaking truck is flowing to the market through multiple channels
On the night of the heavy rain, Wang Yong parked his car in the second floor of the community as usual. What he didn't expect was that in just five hours, his Cadillac sedan was flooded to the roof and became a "full car".
"Not long after the heavy rain stopped, a car dealer came to me to collect the car. The quotation was half of the normal second-hand car price. They took the car away directly, and I didn't have to care about anything." Wang Yong told reporters that because he did not purchase full insurance, his car could only be repaired or sold to the car dealer, but the other party's quotation of 60,000 yuan was really unacceptable, so he had to give up in the end.
A few days later, the water accumulation still reached the upper part of the wheel. (Picture source: Photo provided by the interviewee)
"The Audi A4L parked next to my car has just been bought for half a year, and it was sold for 160,000 yuan in the end," said Wang Yong.
"Second-hand car dealers mainly acquire water trucks without full insurance. Car owners with full insurance basically seek insurance claims. The insurance company will make compensation based on the insurance amount and the valuation of used cars." Zhang Chi told reporters that there are two main channels for water trucks to flow to the market: one is that the second-hand car dealers directly purchase from the owners, and after repair, they flow into the used car market; the other is that the "full-loss car" handled by the insurance company, which is repaired and resold by the maintenance factory and others. In terms of quantity, the latter has a higher proportion.
Vehicles parked on the side of the road during heavy rainstorm.(Picture source: Photo provided by the interviewee)
The latest data released by the Henan Provincial Government Information Office shows that as of August 10, 238,100 auto insurance cases were reported in Henan Province due to heavy rain disasters, with an estimated loss of 6.39 billion yuan. In particular, the Henan Banking and Insurance Regulatory Bureau has also introduced measures such as no on-site inspection, no weather proof, and "presumed total damage" for vehicles with high loss levels in response to the disaster. Under the guidance of "all compensation should be compensated", seeking insurance claims has become the first choice for most car owners of all insurance vehicles.
"According to years of experience, generally speaking, if the water level has exceeded the seat of the car and reaches the dashboard, the theoretically the repair value of the car may be more cost-effective than repurchasing one. It is called 'presumed total loss' in the insurance industry. That is, based on the insurance and depreciation of the specific vehicle, the vehicle loss is directly compensated to the car owner. This is currently the practice in the industry." Wu Xingcai, assistant general manager of the claims department of China United Property Insurance, said in an interview with a reporter from "Daily Economic News".
But it should be noted that it is the common practices mentioned above that have caused a large number of "full loss water-soaked trucks" to accelerate their flow to the market through auctions and other channels. Wang Bing, the head of the auto insurance business of a 4S store of a certain brand, told reporters: "Vehicles with 'total loss' or 'presumed total loss' after claims by the insurance company are not directly scrapped. Their residual value is theoretically owned by the insurance company. Among them, most vehicles with repair value will be entrusted to the auction company to auction the residual value, and vehicles that do not have repair value or meet scrap standards will also be 'breaked' for accessories auction to reduce the insurance company's claims funding pressure."
full-foam car after drying. (Picture source: Photo provided by the interviewee)
"Generally, the compensation for a total loss vehicle and a presumed total loss vehicle consists of two parts: part is the auction proceeds of the residual value of the vehicle, and the remaining part is paid by the insurance company. The owner can cooperate with the transfer after the vehicle is repaired." Wang Bing gave an example for the reporter. If the water truck A is supposed to be fully damaged, it must pay 100,000 yuan in compensation, but the residual value of the vehicle is about 60,000 yuan, and the insurance company actually only pays 40,000 yuan to the owner of A. The auctioned water truck A was sold by the repair shop after repair and finally flowed across the country through used car dealers.
is a key link in the transaction chain, including Boche.com , accident car 88.com, 7Che.com and other full-loss car auction platforms, which have indeed ushered in a business peak after the heavy rain disaster in Henan. According to incomplete statistics from the reporter, the above-mentioned auction platform has held dozens of special auctions of "Henan Water Soaking Trucks" in recent days. Among them, on August 13 and 14 alone, nearly 1,000 "full loss water-soaked trucks" in Henan Province were launched for auction, and most of the auctioneers were bought by buyers from other provinces and cities.
"The number of totally damaged vehicles in Henan is very large, and many special auctions will be held in the next few months." The person in charge of an accident car auction platform told reporters that in a few days, the disaster-stricken vehicles from Zhejiang who were affected by the "fireworks" of typhoon will also start online auctions one after another.
Some water-soaked trucks have a profit of more than 20%
In fact, in the eyes of most practitioners, there is "no car that cannot be sold, only the price that cannot be sold" in the used car market, and "buy low and sell high" is the core business logic of the used car industry. On this basis, there are naturally people who are willing to participate in the soaking truck business with greater profit margins.
"The profit method of water soaking trucks mainly comes from resale after repair and scrapping. For vehicles with severe water soaking, car dealers usually directly transfer to the dismantling factory for scrapping after acquisition, and make a profit ranging from 1,000 to 10,000 yuan; the "semi-foam trucks" with repair value will be sent to the factory for repair and preparation and reselling; the "water-washing trucks" with low water soaking are basically sold after simple treatment, and the profit is also the most considerable." Zhang Chi said.
Image source: Photo provided by the interviewee
Car businessman Liu Lei, who specializes in accident car business, settled the bill for the reporter. According to Liu Lei, he recently acquired a 2014 BMW 525Li "full car" for 90,000 yuan. The normal used car of this model is about 220,000 yuan, which is more than twice the difference between the two."At present, the car has been restored, some buyers have already booked it for 160,000 yuan. After deducting the cost of accessories, they can make a profit of about 40,000 yuan. This is still the profit after being marked as a 'soaked water truck'." Liu Lei said.
When browsing various auction platforms, the reporter found that more "low-priced luxury cars" are being launched one after another. For example, the auction price marked for the 2018 Maserati Levante is only 330,000 yuan; the starting price of the brand new unteared Jaguar XEL is 130,000 yuan; the Mercedes-Benz GLC, which has only two years of car age, was finally sold for 150,000 yuan, and its overall market price is less than half of the normal used cars.
In addition, buyers participating in the auction of full loss car must also provide Class II and above auto repair shops or parts business qualifications. This also means that most buyers participating in the bidding for a full loss car can provide complete services from auction, repair, sales and after-sales service. On the basis of "low-price car collection", their sales and operating costs are also significantly lower than those of ordinary used car operators.
"The total water-flooded cars sold online auctions are mainly 'semi-foam cars' and 'full-foam cars'. This type of repair has a large profit margin. If I have a repair shop myself, the average profit margin of a single car can exceed 20%. If it is a luxury car, it may be higher." Liu Lei said that water-flooded cars with normal second-hand cars priced between 200,000 and 500,000 yuan are the most popular. This type of car is generally a luxury brand. After the repair, many companies purchase it as reception cars or rent it, while mid- and low-end models generally flow to the sinking markets such as counties and townships.
Image source: Photo Network
Experts say consumers don’t need to panic
Although consumers generally expressed concerns about the flow of water trucks into the market, in the eyes of practitioners and industry experts, the secondary sales of water trucks are not a "secret that cannot be told".
"Water-soaked trucks have always occupied a certain share in the circulation of used cars. Although there are not many, there is also market demand." Luo Lei told reporters that my country's current " Second-hand Car Circulation Management Measures for Second-hand Car Circulation " does not explicitly prohibit the transaction of water-soaked trucks. Vehicles designated as "full-loss car" by insurance companies are not equivalent to scrapping. If the vehicle does not meet the scrapping standards, it can be circulated in the market in principle.
"At present, there is no data that water-soaked trucks are prone to major safety accidents, and there is no necessary connection between the two. Water-soaked trucks themselves are not scary, and consumers do not need to panic, nor do they need to 'demonize' them." Luo Lei said.
But it should be noted that even if the soaked water truck can be sold for secondary sales, it is not easy for it to flow into the hands of ordinary consumers through the market.
After this flood disaster, the Henan Second-hand Car Distribution Association immediately issued the "Initiative on Regulating the Business Behavior of the Second-hand Car Industry in the Province after the Flood Disaster" and emphasized that the business entities of each second-hand car distribution enterprise and the majority of second-hand car industry practitioners should clearly inform the vehicle of the real information and not conceal the car condition. It is reported that the initiative has received positive responses from 297 companies including used car trading market , used car dealers, used car appraisal and evaluation agencies.
In addition, the China Automobile Dealer Association and the National Used Car Trading Market also restrict the circulation of water trucks. Among them, the China Automobile Dealer Association has strictly prohibited member units from selling water-soaked trucks, and called on insurance companies not to auction serious water-soaked trucks to car dealers. Leading offline markets such as the old motor vehicle trading market in Beijing and the second-hand car trading market in Chengdu have long been banned from entering and selling water.
Image source: Photo Network
"The current second-hand car transaction process is very formal. Not only do the two parties to the transaction have to sign a contract, but the vehicles must also pass third-party testing." A second-hand car dealer in Beijing told reporters that currently large-scale second-hand car dealers are pursuing quality and service, aiming to build their own brands. Therefore, it is rare to see car dealers involved in accidents, blisters, and burning cars. Even if there are, they will clearly inform the buyer of the car condition in the contract to avoid unnecessary legal risks.
Expert of the China Automobile Dealer Association Wang Meng believes that compared with the overall market, the number of water trucks is not large.Secondly, there will be corresponding records after the water truck is in danger and claims. Even if the vehicle enters the used car market after repair, the operator must inform the customer of this situation and require the customer to sign and confirm.
"As long as you purchase and sign a contract from a regular business merchant, if the merchant has subjective intentional fraud, consumers can sue the merchant for refunding the car or even 'refunding one and three compensation'." Wang Meng said.
Lawyer suggests that the following points should be paid attention to when selling and purchasing soaked water trucks
In fact, with the increasing volume of used car transactions in China in recent years, the number of cases involving operators suspected of "fraud" and excessive consumer rights protection has also increased. According to incomplete statistics from the reporter, in 2011, there were only 15 fraud cases in the second-hand car field that can be found through public channels. By April 2020, the number of such cases had surged to 1,287, an increase of nearly a hundred times in 10 years.
In this context, facing the water truck with more complex conditions and more professional knowledge required, how should all parties to the transaction effectively use legal weapons to protect their own interests? In an interview with reporters, Wu Feng believed that first of all, the "refund one and compensation three" regulations that consumers are most familiar with provide protection for consumers to protect their own rights and interests. According to Article 55, paragraph 1 of the " Consumer Rights Protection Law": "If an operator commits fraudulent acts of providing goods or services, he shall increase the compensation for the losses suffered in accordance with the consumer's request, and the amount of compensation shall be three times the price of the consumer's purchase of goods or the cost of receiving services; if the amount of compensation is less than 500 yuan, it shall be five hundred yuan. If otherwise provided by law, it shall be followed."
Picture source: Photo Network
Wu Feng told reporters that the applicable conditions for consumers to require sellers to "refund one and compensate three" is "the operator provides goods or services to fraudulent acts." The so-called "fraud" refers to the act of one party deliberately informing the other party of false information, or deliberately concealing the true situation, and inducing the other party to make a wrong expression of intention.
"It is generally believed that 'fraud' must have the following three components: First, objectively. The fraudster has committed fraudulent acts of 'intentional informing false situations or intentionally concealing the true situation'; second, subjective. The fraudster has subjective 'intentional' to commit fraud; third, causality. The fraudster makes a wrong judgment based on the fraud and makes a wrong expression of intention based on it, that is, there is a causal relationship between the wrong expression of intention and the fraud." Wu Feng said.
In the process of used car transactions, common fraud is generally caused by the seller deliberately concealing or deliberately informing consumers of false or incorrect vehicle information. Wu Feng said that if the seller deliberately conceals the ownership information of the vehicle and the seller's subject information, and sells the vehicle in his personal name in the name of the owner or the person who conceals the seller as a used car business organization or repair factory, which causes the consumer to make a mistake in purchasing a vehicle, the consumer has the right to ask the seller to refund one and compensate three on the grounds that the seller constitutes fraud.
Wu Feng also emphasized that if used car sellers have fully informed consumers of all important information about the vehicle that may affect consumers' personal health, safety or certain property interests when selling used cars, then used car sellers constitute infringement of consumers' right to know and even pose a small legal risk to consumers.
It should be noted that although the seller can effectively avoid the legal punishment of "refund one and three compensation" by signing a contract and other means, it does not mean that he does not need to bear other legal risks brought by the water truck.
"When a consumer purchases such used cars and causes an accident due to safety hazards in the vehicle, the vehicle sold by the second-hand car seller has safety hazards and does not meet the product quality agreed in the second-hand car sales contract signed with the consumer, the seller of the used car should bear the breach of contract liability to the consumer, that is, the current owner, and compensate the consumer for all losses caused by the accident." Wu Feng told reporters that if the used car is a vehicle purchased by the seller from the repair factory, and the repair factory does not provide the used car seller with product quality vehicles that meet the contract agreement, the seller can also seek compensation from the repair factory for the compensation for the losses that have been compensated for.
(At the request of the interviewee, Wang Yong, Zhang Chi, Wang Bing and Liu Lei are all pseudonyms in the article)
Reporter: Dong Tianyi
Editor: Pei Jianru
Visual: Zou Li
Video Editor: Zheng Derui
Typesetting: Pei Jianru Ma Yuan
Daily Economic News
