ARBITRATION POLICY EFFECTIVE DATE: In-Lane and Online April 17, 2017 - Standards - National Auto Auction Association

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ARBITRATION POLICY EFFECTIVE DATE: In-Lane and Online April 17, 2017 - Standards - National Auto Auction Association
Standards

      ARBITRATION
        POLICY
            In-Lane and Online

            EFFECTIVE DATE:
              April 17, 2017

Standards                        Page 1 of 14
ARBITRATION POLICY EFFECTIVE DATE: In-Lane and Online April 17, 2017 - Standards - National Auto Auction Association
Arbitration Policy
                                                                        Effective Date: April 17, 2017

I.   General Policies:                                 3. Auction VIN Policies

                                                          All vehicles consigned must have a visible
1. Fair and Ethical Sale                                  public Vehicle Identification Number (VIN)
                                                          plate attached to the vehicle by the
     The sales made at an Auction are intended            manufacturer or state inspector (state
     to promote fair and ethical treatment to             reassigned VIN only). Those vehicles having
     both the Buyer and Seller. If Auction                a reassigned VIN plate by the State in place
     determines that the transaction is not fair          of the original VIN plate must be announced
     and ethical to either party, the Seller and          or will be subject to sale cancellation or
     the Buyer agree that Auction may cancel              Buyer return. Auction reserves the right to
     the sale, at its sole discretion. Federal,           refuse the sale of any vehicle in which the
     State, and Local laws supersede these                VIN plate appears to be altered in any way.
     policies where applicable.

2. Auction Role in Sale:

     a.   Auction makes no representations or
          guarantees on any vehicle sold or
          offered for sale.

     b.   Auction is not a party to the contract of
          the sale. The sales contract is between
          the Seller and Buyer only.

     c.   All vehicles bought or sold on the
          premises must be processed through
          the Auction office. Failure to do so will
          result in suspension of trading privileges
          at Auction.

     d.   Auction reserves the right to review any
          audio/video documentation to verify the
          accuracy of a sale.

     e.   Any vehicle consigned with the Auction
          is subject to government inspection,
          with or without prior notice, by the FBI,
          State Police, National Auto Theft
          Bureau, Local Police Authorities, any
          other governmental agency, or quasi-
          governmental agency.

Standards                                                                          Page 2 of 14
Arbitration Policy
                                                                          Effective Date: April 17, 2017

II.   Sale Light System:                               3. Red Light – As-Is: Vehicles selling under
                                                          the red light will only qualify for arbitration
                                                          under the rules outlined in this policy. (As-
      Auction has a standard light/video display          Is dollar amount, model years, and mileage
      system to describe the condition and/or             are subject to local auction policy).
      disclosures related to the vehicle being sold.
      The system is defined as:                        4. Blue Light Title Attached/Title
                                                          Unavailable/Title Absent: This light is
1. Green Light –Ride and Drive: The green                 used to announce that the title is not
   light signals that this vehicle is guaranteed          present (auction managed location) at the
   under the conditions outlined in this policy           time of the sale. For Auction rules regarding
   by the seller. Any defects or issues requiring         titles please refer to the Title Arbitration
   disclosure per this policy should be                   Policy section. If “title
   announced using the green and yellow                   attached/unavailable/absent” is not
   lights.                                                announced, a vehicle could be arbitrated for
                                                          no title in the absence of auction company
2. Yellow Light – Limited Guarantee: This                 policy.
   light is an indication to the Buyer that the
   Auctioneer or Selling Representative has
   made announcements that qualify/clarify
   the condition or equipment and limit
   arbitration of this vehicle in conjunction with
   the green light or when “limited guarantee”
   is announced.

                                  Announcement /Light Legend
                                                     Light Usage Recommendation
                    Announcements:
                                                    Green      Yellow     Red
                    Ride & Drive Only                 P         N/A      N/A
                Ride & Drive with Caution             P          P      N/A
                 Limited Guarantee Only              N/A          P      N/A
                   As-is, No Arbitration             N/A         N/A       P

Standards                                                                             Page 3 of 14
Arbitration Policy
                                                                         Effective Date: April 17, 2017

III.     Seller Responsibilities:
1.   Seller will be held responsible for the          6.   The announcement of the presence of
     accuracy and completeness of all                      warning lights does not exempt a Seller
     representations or descriptions. This                 from arbitration responsibilities as defined
     includes handouts, catalogues, vehicle                by the policy. The issue/defect found to be
     markings, condition information or vehicle            the cause of the light may be arbitrated
     listings and verbal or written statements             within the stated time period and dollar
     made by Seller, Auction, Auctioneer or                amount threshold according to Appendix 1.
     Selling Representative at the time of sale.
     This includes the condition report written by    7.   The availability of a manufacturer’s
     or on behalf of the seller as per the “NAAA           warranty shall not affect a Buyer’s right to
     Generic Condition Report Position                     arbitrate a vehicle. Regardless of the
     Statement”. The Seller understands that               warranty coverage in terms of the root
     the sale light/video display is a binding             cause of the complaint, an announcement
     arbitration representation of vehicle                 may be required.
     condition, and is therefore responsible for
     ensuring that their vehicles sell under the      8.   In the event of a successful arbitration by
     correct light in the lane.                            the Buyer, the Seller is responsible for
                                                           reimbursement of all reasonable
2.   Mileage announcements are not required for            documented expenses incurred by the
     vehicles that are 10 years or older and/or            Buyer (excluding profit, commissions and
     deemed exempt from Odometer and Title                 detail charges) on vehicles arbitrated for
     disclosure laws unless a mileage                      undisclosed conditions. Reimbursements
     discrepancy is known or apparent to the               that qualify under these guidelines will be at
     seller. The Seller may represent miles on             the sole discretion of the Auction and will be
     exempt vehicles; any disclosures made by              limited to the reasonable and documented
     the Seller and all known odometer                     expenses at auction (wholesale) repair cost.
     discrepancies are grounds for arbitration.
                                                      9.   Seller will not be paid for vehicles in
3.   Title discrepancies must be announced                 arbitration until arbitration is settled and
     including, but not limited to: not actual             vehicles are sold. For arbitrations occurring
     miles, salvage, theft recovery, stolen                after the seller has been paid, seller is
     vehicle, flood damage, Lemon Law buybacks             required to promptly return the payment to
     and trade assist.                                     the auction if the transaction is voided as a
                                                           result of arbitration.
4.   If a vehicle is being offered for sale by a
     third party, an announcement of “3rd Party
     Seller” is required. Disclosure requirements
     and time limits are subject to local auction
     policy.

5.   Announcements are required for any
     matters that relate to the safety or integrity
     of the vehicle including as per the stated
     dollar threshold and disclosure requirements
     stated in this policy, all requirements under
     local, state or federal statutes or
     regulations. Announcements must be made
     both verbally and disclosed on the auction
     invoice/sale contract/bill of sale or
     equivalent document in a physical or online
     auction environment.

Standards                                                                            Page 4 of 14
Arbitration Policy
                                                                              Effective Date: April 17, 2017

IV. Buyer       Responsibilities:                          6. The Buyer shall not surrender possession of
                                                               the vehicle to any claimant, except as
1. Prior to placing bids, the Buyer is responsible             required by legal process, nor shall Buyer
    for inspecting the vehicle, listening to and
                                                               voluntarily pay or acknowledge the validity
    reviewing any verbal or written announcements
                                                               of any claim, without the prior approval of
    and disclosures made by the Seller, Auction,
                                                               Auction. Time is of the essence. Any failure
    Auctioneer or Selling representative. Buyers are
                                                               on the part of the Buyer, after becoming
    also responsible for reviewing all pertinent
                                                               aware of said claim, to notify Auction of any
    information available online, including, but not
                                                               claim in a timely manner or failure of the
    limited to, announcements, disclosures,
                                                               Buyer to cooperate in defending any such
    condition reports, pictures and online listings.
                                                               claim shall relieve Auction and seller of any
    Buyers are also responsible for observing and
                                                               liability under this policy.
    understanding the sale lights (Green,
    Green/Yellow, Yellow, Red, and/or Blue), which         7. A vehicle is not considered returned until
    identify various sale conditions for the vehicle.          received, inspected and approved for return
    Once the vehicle is sold, the Buyer must review            by Auction management. Any vehicle
    the Auction sales receipt or appropriate                   returned must be in the same or better
    document to confirm the vehicle price,                     condition as when sold. Any vehicles
    disclosures and announcements are correct                  delivered to and left on Auction premises
    before legibly printing and signing their name or          without Auction approval remain the sole
    digitally/electronically signing the Auction sales         responsibility of the Buyer. Buyer assumes
    receipt or appropriate document.                           all risk of loss. Vehicle must be returned in
                                                               a timely manner consistent with Auction
2. It is strongly encouraged that a Buyer should               direction.
    have a Post Sale Inspection (PSI), warranty or
    assurance product from the auction on vehicles         8. Vehicles with over (auction choice) miles
    purchased.                                                 from when sold are not eligible for
                                                               arbitration.
3. Buyer agrees to be liable for any and all work
                                                           9. The Seller/Auction shall not be liable for any
    done to a vehicle (including a vehicle purchased
                                                               vehicle sale or repairs made by the Buyer
    as title attached, unavailable or absent) prior to
                                                               before the title is received by the Buyer. If
    returning the vehicle to Auction except on
                                                               the title has been mailed from Auction to
    vehicles arbitrated for undisclosed conditions
                                                               Buyer, Buyer may not return vehicle. If the
    not detectable through vehicle inspection,
                                                               Seller presents a valid negotiable title to the
    including but not limited to, not actual miles,
                                                               Auction within close of business on the next
    salvage, theft recovery, stolen vehicle, flood
                                                               day (excluding weekends and auction
    damage, Lemon Law buybacks and trade assist.
                                                               observed holidays) from the time that the
                                                               Buyer notifies the auction of their intent to
4. The Buyer is financially responsible for any                return the vehicle, then the transaction will
    pending sale and assumes all risk of loss until
                                                               stand.
    arbitration is final.

5. The Buyer or Buyer’s agent (transporter or
    driver) must document any damage on the gate
    release prior to removing the vehicle from the
    Auction or facilitation service provider’s location.
    Auction or facilitation service provider and Seller
    will not be responsible for any damage not
    identified on the gate release once the vehicle is
    removed from the location.

    Standards                                                                             Page 5 of 14
Arbitration Policy
                                                                           Effective Date: April 17, 2017

V.   Title Arbitration Policy:                         6.   If the title problem is due to a clerical or
                                                            coding error, or incomplete documentation,
                                                            Auction shall be given reasonable time after
1.   All titles submitted by Seller must be in
                                                            receiving notice to have the error corrected.
     Seller’s company name on title or on a
     properly executed reassignment form. The
                                                       7.   Applications or other documents related to a
     Seller guarantees the titles of vehicles that
                                                            duplicate title will not be accepted, unless
     are sold through Auction. This guarantee of
                                                            announced as such or if allowed by the
     the title warrants that the title shall be
                                                            appropriate jurisdiction.
     marketable and free and clear of all liens
     and encumbrances. This includes any brand
                                                       8.   Where legal by municipal and/or state law,
     (such as “salvage”) noted upon the current
                                                            any vehicle being offered for sale with a
     or any prior certificate of title unless such
                                                            foreign (non-US) title, must be disclosed
     encumbrances were announced at the time
                                                            prior to the sale by the seller. Disclosure
     the vehicle is sold through Auction and for a
                                                            requirements and time limits are subject to
     period of four (4) years from the date of
                                                            local auction title policy. Vehicle must be
     sale. Seller’s liability under this title
                                                            legal to sell in the United States.
     guarantee shall never exceed the Auction
     sale price (the “maximum amount”) of the
                                                       9.   Seller has up to a maximum of [see
     vehicle, and this maximum amount shall be
                                                            individual Auction Company’s Title Policy
     reduced by two percent (2%) per month
                                                            (Auction Choice)] calendar days for title to
     following Auction sale date. All liability
                                                            be received by Auction. (Sale day is Day 1).
     under this title guarantee shall expire and
                                                            After (Auction Choice) calendar day period,
     terminate four (4) years after Auction sale
                                                            it is the Buyer’s option to return the vehicle
     date. Auction will not be responsible for
                                                            or wait a reasonable period of time for the
     any expenses incurred on vehicles returned
                                                            title. If, after 90 calendar days, Seller has
     for late title.
                                                            not produced negotiable title and Buyer has
                                                            not returned the vehicle, this title guarantee
2.   Seller warrants, represents and guarantees
                                                            shall not apply and Auction shall have no
     possession and conveyance of a certificate
                                                            duty to produce the certificate of title to the
     of title, properly executed, valid in the state
                                                            Buyer and shall have no duty to pay Seller.
     where the transaction is occurring and clear
     of all liens and encumbrances (except
                                                       10. Vehicles lacking a properly assigned title or
     current year DMV fees in California), and
                                                           reassignment to transfer a title at time of
     seller warrants and will defend the title
                                                           sale must sell “Title Attached/Title
     against the claims and demands of all
                                                           Unavailable/Title Absent,” with the Blue
     persons whatsoever.
                                                           light on.
3.   Seller will ensure that the title must be
                                                       11. Vehicles lacking lien release or a valid repo
     reassigned directly to Buyer. Any title
                                                           affidavit for a repossessed vehicle (where
     assigned directly to facilitating auction will
                                                           allowed by law) must be sold “Title
     not be accepted.
                                                           Attached/Title Unavailable/Title Absent,”
                                                           with the Blue light on.
4.   Seller will not be paid for vehicles until a
     transferable title is received.

5.   Auction accepts no responsibility for non-
     titled vehicles sold without title. Seller must
     announce the vehicle being sold with a bill
     of sale only and that there is no title to
     transfer. All non-titled vehicles and
     equipment will be sold “As-Is.”

Standards                                                                              Page 6 of 14
Arbitration Policy
                                                                           Effective Date: April 17, 2017

12. In regard to defect in title, and in any         3. Required Conversion
    matter relating to odometer mileage,
    odometer statements, or damage disclosure            a.   All other vehicles imported must be
    statements: Seller and Buyer agree to                     imported through a Registered
    indemnify and hold harmless Auction from                  Importer. Registered Importers are
    any liability, loss costs, damage or expense,             required to post a bond with the U.S.
    including attorney fees which may arise                   Department of Transportation and/or
    either directly or indirectly from the sale               National Highway Transportation Safety
    and purchase of the consigned vehicle                     Administration. All vehicles imported
    including but not limited to title services               through a Registered Importer must
    provided.                                                 have:

13. Whenever any claim is made by any person                   i.    U.S. Safety Standard Certification
    against the title of a vehicle, whether by                       Label that identifies the Registered
    suit or otherwise, the Buyer, after becoming                     Importer
    aware of said claim, shall immediately notify              ii.   Valid U.S. Title or Legal Foreign Title
    Auction. This involves giving full particulars            iii.   Meet ALL Federal NHTSA, D.O.T.
    of claim, cooperating fully in defending any                     and/or E.P.A. Mandated Guidelines
    legal action, and in taking other steps to                iv.    Documentation must be provided at
    minimize possible loss.                                          any time by seller.
                                                              v.     Cleared the mandated wait time.

                                                         b.   All vehicles, whether imported by a
VI. Previous  Canadian                                        Manufacturer or a Registered Importer,
    and/or Grey Market                                        must show miles per hour on the
                                                              speedometer and miles traveled on the
    Vehicles:                                                 odometer. Title 49, United States Code,
                                                              Chapter 327, Section 32704, allows
1. A “Previous Canadian” disclosure is required               replacement odometers without a door
   for any vehicle (regardless of manufacturing               frame sticker if the conversion from
   origin) having been registered in a Canadian               kilometers to miles can be done without
   province. Additional announcements may be                  changing the distance traveled by the
   required as well due to the use in Canada                  vehicle; therefore, replacement of an
   (i.e. Full or partial voided warranty, foreign             odometer under these circumstances
   title and etc.)                                            does not have to be announced by the
                                                              Seller.
2. Any vehicle not originally built to U.S.
   specifications can, under certain
   circumstances, be imported through a              VII.     Arbitration Guidelines:
   registered importer who modifies the
                                                     Vehicles that have any of the defects outlined in
   vehicle to comply with U.S. equipment and
                                                     Appendix I that were not disclosed by the seller
   safety regulations (DOT and NHTSA) and
                                                     or announced at the time of sale must be
   then certifies it as compliant, and an
                                                     reported to Auction within the time frame noted
   independent commercial importer who
                                                     below in order to be eligible for arbitration.
   modifies the vehicle to comply with U.S.
                                                     Vehicles must be returned to Auction in the
   emissions regulations and then certifies it as
                                                     same or better condition than when purchased
   compliant. Only vehicles properly converted
                                                     with no more than (auction choice) miles.
   to U.S. specifications can be sold and must
   be announced as such.

Standards                                                                               Page 7 of 14
Arbitration Policy
                                                                       Effective Date: April 17, 2017

1. Time Period: Refer to Appendix I for                 cannot be arbitrated for manual clutch
   arbitration time periods. Sale day is Day 1.         assemblies unless the defect will not allow a
   Arbitration shall end at the close of business       safe test drive.
   as determined by each Auction on the last
   calendar day in the time period.                  e. Wearable Items: Auction will not arbitrate
                                                        vehicles for wearable items normally worn
2. Process: Any single mechanical defect that           vs excessively worn or inoperative (not
   has a repair cost of $500 or more is subject         inherent). For purposes of this policy
   to arbitration on vehicles sold under                wearable items are defined as parts of the
   qualifying lights and lack of announcement           vehicle that the manufacturer recognizes
   by the seller per Appendix I. Each vehicle           the need for replacement/adjustment during
   transaction is allowed one chance at                 the expected life of the vehicle driven the
   arbitration. The arbitrator will inspect only        average miles per model year (15k). These
   the defect that is on the initial arbitration        items are normally identified in the Owner’s
   claim. Repair costs will be determined by            Manual for routine check and replacement
   the auction and will reflect the auction cost        and would include, but are not limited to,
   to repair. If price adjustment is made and           air ride suspensions, tires, wipers, brake
   accepted, vehicle becomes “As-Is, No                 pads, shoes, rotors, belts, hoses,
   Arbitration” property of the Buyer, and is           lubricants/fluids, timing belts, bulbs, filters,
   not subject to any further arbitration. The          shocks and struts.
   auction management makes the binding
   decision upon both the Buyer and Seller on        f. Unsafe vehicles: Auction reserves the right
   all arbitration matters.                             to reject any vehicle that management
3. Fees: Auction reserves the right to assess           judges to be unsafe.
   an arbitration fee to the Buyer. If the
   arbitration is valid, Auction reserves the        g. Vehicles may not be arbitrated based solely
   right to assess an arbitration fee to the            upon information provided in Electronic
   Seller in addition to any charges associated         Data Vehicle Histories (EDVH) or printed
   with the arbitration.                                EDVH reports. Auction and Seller are not
                                                        bound by information listed in EDVH.
4. Not subject to arbitration:                          Examples of EDVH include Carfax,
   a. Vehicles exceeding 20 model years, with           AutoCheck, NMVTIS, etc. The facilitating
      the exception of trailers, RVs, and               Auction may investigate vehicle history
      watercraft, which cannot be arbitrated if         based on information found in EDVH for
      they exceed 10 model years.                       information that may impact arbitration.

    b.   Kit vehicles, homemade vehicles, or         h. Auction is not bound by vehicle grades or
         modified vehicles are sold “As-Is” and         other types of scoring systems placed upon
         cannot be arbitrated for odometer,             the vehicle. Buyers may only arbitrate a
         structural issues, warranty books, or          vehicle based upon damage or defects that
         model year.                                    were present at the time of the sale of the
                                                        vehicle.
    c.   Inherent Conditions: No arbitration can
         be based on conditions that are inherent    i. Vehicles with more than (auction choice)
         or typical to a particular model or            miles from time of sale.
         manufacturer. Manufacturer warranty
         guidelines will be used where applicable
         to determine whether the condition is
         inherent. Additional resources can be
         found on NAAA’s Standards page at
         www.NAAA.com.

 d. Manual Transmissions: Vehicles with
    standard (full or partial shift) transmissions

Standards                                                                          Page 8 of 14
Arbitration Policy
            National Arbitration Policy Guidelines (Appendix 1) Amended 9/5/17     Effective Date: April 17, 2017

Standards                                                                             Page 9 of 14
Arbitration Policy
                                                                      Effective Date: April 17, 2017

VIII.        Structural Damage,                         b. UVMS-Used Vehicle Measurement
                                                           Standard. The commercially acceptable
             Alteration or Certified                       measurement deviation from the
                                                           vehicle’s original structural
             Structural Repair or                          specification in order for any deviation
             Replacement Policy                            not to be considered structural
                                                           damage.
The purpose of the NAAA Structural Damage
Policy is to define and clarify terminology             c.    Permanent Damage (aka “Kinked” or
associated with structural issues and to specify             “Broken”)- The result of two or more
the disclosure requirements of the seller for                objects striking or coming together at a
vehicles offered at NAAA affiliated auctions.                significant change in velocity that
The policy is intended to provide adequate                   permanently deforms the structural
disclosure to the buyer for informed purchase                component(s) rendering it non-
decisions and to limit arbitrations for the seller.          repairable per the manufacturer.
This policy, along with the main Arbitration
Policy will serve as the primary criteria for all
arbitration proceedings.                              2. Recommended Disclosures
                                                        a. Structural Damage-Damage to the
1. Definitions                                             structure or a specific structural
    a. Vehicle Structure-The main load-                    component of the vehicle. Often
       bearing platform of a vehicle that gives            referred to as frame damage, although
       strength, stability and design                      it also applies to Unibody and Unibody
       exclusivity and to which all other                  on Frame structures in addition to
       components of the vehicle are                       Conventional Frame.
       fastened. For purposes of this policy,
       there are three macro types:                     b. Certified Structural
                                                           Repairs/Replacement-Repairs to a
        i.    Unibody - A type of structure                specifically identified structural
              whereby the floor pan assembly, roof         component of a vehicle that has been
              bows/braces, pillars, etc. are bonded        certified to be within the Used Vehicle
              together into one unit, thereby              Measurement Standard (UVMS).
              eliminating the need for a separate
              conventional structure                    c.   Structural Alteration -An alteration
                                                             to the vehicle’s structure including a
      ii.     Unibody on Frame-A type of                     lengthened or shortened frame, a
              structure whereby a unitized                   modified suspension, or the installation
              structure is bolted to a conventional          or removal of after-market accessories.
              structure.

     iii.     Conventional Structure-A type of
              structure consisting of two
              symmetrical rails (beams) connected
              by various cross-members.

Standards                                                                       Page 10 of 14
Arbitration Policy
                                                                 Effective Date: April 17, 2017

3. Seller Disclosure Requirements                  h.   Corrosion of structural components
                                                        determined by one or more of the
Sellers must disclose permanent structural              following; when the substrate loses its
damage, any structural alterations, structural          shape, the original bonds near the
repairs or replacements (certified or non-              affected area are loose or are no
certified) as outlined in this policy prior to          longer in existence, the original
selling a vehicle at auction regardless of sales        thickness of the substrate has been
channel or light condition. Disclosures are             changed by more than 25%, the
required for the following:                             affected area no longer possesses its
                                                        absorption or deflection properties.
    a.   Any/all existing permanent (non-
         repairable aka kinked or broken)          i.   Structural tear damage (i.e. transport
         structural damage as defined in this           tie down) if more than 1" in length
         policy                                         (measured from tear start/stop points)

    b.   Improper and/or substandard prior         j.   Damage due to improper jacking or
         repairs (not meeting OEM repair                lifting that permanently deforms
         guidelines)                                    structural components outlined in this
                                                        policy.
    c.   Repairs not certified using OEM
         guidelines or to be within the UVMS       k.   Damage due to contact with parking
         Improper alterations to the structure          abutments and/or road debris that
         Lengthened or Shortened structure              permanently deforms structural
         verified by visual inspection.                 components outlined in this policy.

    d.   Altered suspension that requires the      l.   Roof bows/braces that have been
         structure to be modified from its OEM          modified, have existing permanent
         form.                                          damage or removed. A replaced roof
                                                        skin is not a required disclosure in
    e.   After-market accessories installed or          terms of the Structural Damage Policy.
         removed to the structure.
                                                   m. The C pillar/quarter or Cab panel may
    f.   Towing packages installed (or                or may not be a structural
         removed) where new holes are drilled,        component(s) as per the vehicle
         OEM holes are enlarged, or if the            manufacturer.
         towing package is welded or brazed to
         the structure.

    g.   Multiple access holes (regardless of
         size) or singular access holes greater
         than 5/8". Access holes between 1/4"
         and 5/8" are subject to disclosure
         based upon location and condition of
         structural component.

Standards                                                                  Page 11 of 14
Arbitration Policy
                                                                         Effective Date: April 17, 2017

4. Arbitration Rules for Structural                             responsible for the charges paid to the
   Damage, Alteration, Certified                                facility.
   Repairs or Certified Replacement
                                                     f.         Visual evidence supersedes any/all
    a.   A vehicle may be arbitrated if it has                  mechanical or electronic
         undisclosed existing permanent                         measurements.
         damage alteration, Certified Repairs or
         Certified Replacement, which should         g.         For measurements according to the
         have been disclosed under this policy,                 UVMS, the following guidelines will
         even though the vehicle is within the                  apply:
         UVMS. If a structural issue is properly
         disclosed, the vehicle may only be               i.        The vehicle structure must
         arbitrated for improper repair of the                      measure to a total tolerance of no
         designated area, existing permanent                        more than +/- 8 millimeters (mm)
         damage or repairs to other areas of the                    of published specification of length,
         vehicle not disclosed, or for failure to                   width and height at control points
         be within the UVMS that was verified                       that capture the front (2), center
         by visual inspection.                                      (4) and rear (2) sections of the
                                                                    vehicle.
    b.   Damaged or replaced radiator core
         supports or rear body panels do not              ii.       Symmetrically (comparative
         require a structural disclosure under                      measure from side to side and
         this policy.                                               point to point based on point
                                                                    measurement), the length, width
    c.   Damage to the aprons, rail floor pan                       and height must measure to a
         assembly, inner wheelhouse (upper or                       difference of no more than
         lower), D pillar (if equipped) or other                    6 mm. Upper body measurements
         ancillary structural components on a                       (tram gauge) by themselves will
         unitized structure in the area where                       not be adequate.
         the radiator core support or rear body
         panel attaches will require a disclosure    h.         Buyer must arbitrate any/all structural
         if permanent damage exists.                            misrepresentations as outlined in this
                                                                policy within published timelines
    d.   Brazed exhaust hangers are not a                       (outlined in the main Arbitration Policy
         required disclosure under this policy.                 Guidelines) from date of purchase
                                                                (purchase day counts as Day One).
    e.   Facilitating auction will, at its
         discretion, have a vehicle measured         i.         The buyer must contact and follow the
         according to the UVMS at a facility of                 arbitration process of the auction
         its choice. Prior to sending the vehicle               where the vehicle was purchased
         for measurement, the auction reserves                  including the auction’s direction for
         the right to complete a visual                         return of the vehicle and the timeframe
         verification of the physical condition of              allowed for the vehicle to be returned.
         the vehicle to determine that it should
         be measured. If the measuring facility      j.         In the event of improperly disclosed
         determines that the vehicle is within                  structural damage by the seller, the
         the UVMS, the buyer of the vehicle will                buyer will be entitled to reimbursement
         be responsible for the charges paid to                 in accordance with the main Arbitration
         the facility. Likewise, if the measuring               Policy.
         facility determines that the vehicle is
         not within the UVMS, the seller will be

Standards                                                                           Page 12 of 14
Arbitration Policy
              Effective Date: April 17, 2017

Standards               Page 13 of 14
Arbitration Policy
                                                                          Effective Date: April 17, 2017

                                                   2. Disclosure Required
 IX.     Flood, Damage Policy
                                                      Disclosure is required and arbitration shall
Vehicles are frequently exposed to moisture           be allowed under the following conditions:
during their ordinary operation, maintenance,
and reconditioning. Occasionally, such                a.        The title has been correctly branded
exposure may leave residual marks or                            indicating flood history of the vehicle.
indicators similar to those left by exposure or
immersion of the vehicle in floodwater. In            b.        Any of the following components have
determining what conditions require disclosure                  been damaged due to stream, pond,
or in arbitrating vehicles for flood                            puddle or floodwater
exposure/damage it is critical that the total                   immersion/ingress:
condition of the vehicle be considered including
VIN data history. Disclosure requirements can              i.       Front or rear internal lighting or
be found in Appendix I.                                             wiring harnesses
                                                        ii.         Engine and its major components
1. Disclosure Not Required                             iii.         Transmission and differential
                                                       iv.          Dash instrument panel and wiring
    No disclosure is required nor is arbitration        v.          Passenger seat cushions
    allowed for the following types of water           vi.          Power seat functions or window
    exposure, provided that none of the                             motor
    components outlined below are damaged:             vii.         Major sound system components

    a.   Rain, snow or sleet due to open
         windows, doors or tops or leaking
         seals.

    b.   Car wash or rinse water.

    c.   Carpet or upholstery shampooing or
         cleaning.

    d.   Stream, pond, puddle or floodwater
         that does not rise above the rocker
         panel or otherwise enter the passenger
         compartment.

    e.   Stream, pond, puddle or floodwater
         that enters the luggage compartment,
         but does not damage any electrical
         components (such as lighting or wiring
         harness) or does not enter the
         passenger compartment.

Standards                                                                           Page 14 of 14
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