The South African Insurance Association has estimated there are about a million stolen cars on SA roads that have been registered illegally.

The South African Insurance Association (SAIA) has estimated there are about a million stolen cars on SA roads that have been registered illegally.

According to , Michael Denenga, legal adviser of the SAIA, told the portfolio committee on the public service and administration in Parliament on Wednesday that one out of every three short-term insurance claims was false.

Denenga said many of these stolen vehicles, also referred to as ghost cars, had what appeared to be legal documents. He said many of this paper work came from corrupt scrap metal dealers.

"A swindler buys a car wreck from a scrap yard to lay his hands on the registration documents," said Denenga. "He then leaves the wreck there, but uses the documents to re-register a stolen vehicle."

He said that about 54 per cent of stolen vehicles were reregistered with the assistance of corrupt traffic officials in licensing departments. There had been numerous cases across the country where licensing departments issued certificates without even seeing the vehicles.

Denenga said the best way to solve the problem would be to crush all car wrecks and to destroy the registration documents.