Part II: Who Owns the Inspection?
By Dane Hulse | Auto Auction Review
In Part I, we talked about the price of risk. Buy an AS-IS vehicle, and you’d better leave yourself room for surprises. That’s wholesale.
But what if the surprise isn’t just a bad car? What if it’s a bad inspection?
Overall, online auction platforms have made buying vehicles sight unseen a whole lot easier. Photos, condition reports, engine audio, and limited test drives give buyers information they wouldn’t have had years ago.
But if buyers are expected to rely on an inspection, that inspection needs to be as accurate and complete as reasonably possible.
“CHECK ENGINE LIGHT ON” ISN’T ENOUGH.
Too many AS-IS inspections report a check engine light without providing the actual diagnostic codes. Some platforms disclose them. Others don’t.
A loose gas cap and a cylinder misfire aren’t remotely the same problem. One might be a nuisance. The other could point to a much more expensive repair.
If you’ve scanned the car, give us the codes. Don’t make us guess.
WHAT HAPPENS WHEN THE AUCTION MISSES IT?
Say an inspector overlooks a significant problem. I buy the car, pay to ship it, and discover the issue when it arrives. The answer is, “Sorry, AS-IS.”
Really?
I’m not asking inspectors to predict the future. An intermittent transmission shudder might not show up on a short test drive. And let’s face it, certain vehicles have known weaknesses. Nissan CVT transmissions and some GM transmission applications come to mind. Experienced buyers should understand the risks associated with the vehicles they’re buying and price those risks accordingly.
But there’s a difference between an inherent mechanical risk and a condition an inspector reasonably should have caught.
If an auction or platform employs the inspector, I believe it should take responsibility for material inspection mistakes. An AS-IS disclaimer shouldn’t automatically end the conversation when an inspection fails to disclose a significant, observable problem.
CAN’T TEST IT? SAY SO.
Four-wheel drive, certain electronics, and other systems aren’t always practical to verify during an inspection. Fine. Don’t imply they’ve been checked if they haven’t.
NOT INSPECTED — CONDITION UNKNOWN — NO GUARANTEE OF OPERATION.
Now I can bid accordingly. Maybe the car brings less money. That’s the point we made in Part I: risk has a price.
Give buyers the facts—or tell them what you don’t know—and let the market decide.
AND WHAT ABOUT THE SELLER?
You can’t make every seller tell the truth. We all know that. And AS-IS doesn’t require a seller to announce every worn-out part.
But there’s a difference between selling a vehicle with an unknown problem and knowingly misrepresenting its condition.
And if the unit has “ARB” written in grease pencil across the windshield—gee, there might be a problem.
Required announcements are still required. AS-IS shouldn’t excuse misrepresentation.
SO WHERE DOES THAT LEAVE US?
Nobody expects a used vehicle to be perfect, especially in the wholesale market. Mechanical failures happen. Sometimes a vehicle develops a problem nobody could have reasonably anticipated.
That’s part of the business.
But there’s a difference between accepting the risks of buying a used vehicle and accepting an inaccurate inspection or a material misrepresentation.
As we discussed in Part I, buyers need to know what they’re buying and leave room in the price for what they don’t know.
And that works both ways.
Buyers should own the risks they knowingly take. Sellers should own their representations. And auctions and platforms should take responsibility for material mistakes in the inspections they provide.
AS-IS is a condition of sale. It shouldn’t be an excuse for a bad inspection.