Last week’s Part 1 of the ATK covered what to do in the event of a Green Light car fails PSI- and the seller thinks/knows it is a mistake.  AAR outlined 10 steps as best practices to combat the failed PSI.

Part 2 walks us through the steps when a sold unit (assume a passed PSI in this case) is placed in arbitration.

Once again, for any seasoned seller, the scenario often unfolds like this-

1.  Vehicle is sold, Green Light, passes PSI (YEE-HAAAA!)

2.  Vehicle is transported from the auction, assume it is going out of state.

3.  Seller turns in the title, gets paid; the seller is happy, as the transaction is complete— OR IS IT?

4.  On the 9th day after the sale, our old friend Seller A gets a text and email stating that the vehicle is in arbitration from Big Box X auction.

5.  Now what???? The arbitration game starts.

Anyone who has read Part 1 of the ATK knows what’s coming; overworked auction arbitrators have to sift through the hundreds of arb cases that are filed monthly.  The process of working through dealer arbitrations takes time, in many cases up to 30 days or more, depending on several factors which we will cover later.

Seller A, being an experienced seller, has learned what steps to take when one of her sold vehicles is placed in arbitration.  Referring back to Part 1, here is what she must do:

1.  Upon receiving notice of arbitration, call the auction immediately, and ask to speak to an arbitrator; have your 5M number and last 6 of the VIN ready.  Keep in mind that when you are first notified of an arbitration filing, an arbitrator has not yet been assigned to your case; or if one has, it probably has not been looked at yet.  Ask the auction who the assigned arbitrator is (if possible), and get contact information.  Often times the auction will not provide this information to you.

2. Take copious notes– this is crucial to any successful arbitration defense. Dates, times, names, conversations, all need to be documented.  As a refresher, here are the timelines to be aware of:

 A)  A PSI-guaranteed vehicle is covered from 14 days of the sale, sale day being day 1.  The SELLER is responsible for the first 10 days of the coverage, days 11-14 are on the auction.  DO NOT LET THEM TELL YOU OTHERWISE.  If the sold vehicle is NOT PSI guaranteed, the time line shortens to 10 days from the day of sale- seller covers the vehicle.

B)  The vehicle, upon being received by the buyer, has 48 hours to inspect and arbitrate the vehicle.  Ask for a BOL from the buyer as proof this was followed.  Sellers need to keep in mind that any Buyer Withdrew arbitration will have you on the hook for the buyer’s transport, AND your transport back to your lot.  That could reach thousands of dollars quite easily.

C)  Upon assignment of an arbitrator, the buyer has 5 days to get the car to the auction for inspection. Larger auctions have recently started using mobile inspectors- keep this in mind.  Make sure the buyer gets the unit to the auction within the 5 days (if it gets there on day 6, you may get the arbitration closed- Buyer Bought.  AAR’s advice is to monitor the situation– don’t encourage the buyer to get the vehicle to their auction of choice; but as with ANY arbitration scenario, continue to keep in contact with the auction.

D)  Keep in mind that this process can be long and arduous- not to mention, your money is tied up- if you’ve been paid already, Big Box X auction can ding your account for the sold amount, and if you weren’t paid, until the arbitration is settled, you cannot get paid.  It is imperative that you as a seller stay on top of your arbitrations.  If you sell a considerable volume, consider keeping all of your arb issues on a spreadsheet to remain organized.

Part 2 of the ATK from this point, follows the best practices of Part I.  As a refresher, here are the rest of the steps to follow to best protect you from an unwarranted arbitration.  See Part 1 for more details.

3. Get your facts together on the vehicle sold

4.  Know any inherent issues on certain makes/models

5. Seek a second opinion

6. Have the vehicle taken to an outside shop for diagnosis

7. Consider a $$ adjustment for the buyer

8. Escalate the case

9. Live to fight another day

10. Register with Auto Auction Review – https://autoauctionreview.com/account/ 

One last Pro-Tip:  In the event of a non-PSI guaranteed sale and subsequent arbitration, ask the auction to consider the history of the buyer.  Do they frequently arbitrate vehicles?  It’s one of the oldest tricks in the book- Purchase a vehicle out of state and automatically arbitrate it.  The buyer knows that at LEAST an adjustment is forthcoming, as the seller is responsible for the buyer transport costs in the event of his successful arbitration.

Next week:  Part 3- Buyer’s Remorse (how to successfully file a buyer arbitration the right way).

Let us know your thoughts in the comments below.

Review, Rate, and Resolve!