When selling at an auto auction, the last thing you want to do is spend time disputing arbitrations and paying fees. Arbitration can be a stressful experience if you're concerned about the outcome.
At Big Valley Auto Auction, we consign over 500 vehicles weekly and sell over 15,000 cars annually. We understand disputing an arbitration can be time-consuming and confusing if you haven't needed one in the past. We will share how arbitrations work and what to expect when your vehicle is undergoing arbitrations at Big Valley Auto Auction.
This article will cover what procedures to expect when your vehicle is being arbitrated so you can prepare for the outcome. We will discuss the following:
- What is Arbitration at Big Valley Auto Auction?
- What are the Requirements for Arbitration at Big Valley Auto Auction?
- What are the Types of Arbitration I Should Expect?
- What Should Sellers Expect When Their Vehicles are Being Arbitrated at Big Valley Auto Auction?
- What are the Outcomes of an Arbitration?
- How is the outcome determined?
What is an Arbitration at Big Valley Auto Auction?
Arbitration is a process that resolves a dispute between a Buyer and a Seller. This allows Buyers to contact the auction with a purchase they feel was not represented properly at the time of sale. The issue is presented to the Arbitration team, and the investigation begins.
Big Valley Auto Auction aims to promote fair and ethical treatment to Buyers and Sellers. The Buyer and Seller agree that Big Valley Auto Auction acts as a neutral third-party arbitrator to resolve issues with the sale. If the auction determines a transaction is unfair or unethical, both parties agree to the outcome.
What Are the Requirements To File an Arbitration?
Arbitration begins with the light color a vehicle is run under and any announcements made at the time of sale.
Your vehicle is liable for arbitration if you did not accurately represent the sold vehicle. For example, if you fail to disclose issues required by the vehicle's light color, it will be liable for arbitration.
Undisclosed issues, electrical issues, unannounced title brands, late titles, and mileage discrepancies are all grounds for arbitration. Depending on the light the vehicle ran under, an undisclosed issue could be frame damage or a mechanical issue. For example, a vehicle purchased on a Green Light with an undisclosed oil leak that costs more than $600.00 to repair is eligible for arbitration.
What Type of Arbitration Should I Expect?
Undisclosed Mechanical Arbitrations:
Green Light Vehicle Arbitration
If a Buyer purchases a Green Light Vehicle, they have 7-days to file an arbitration for any single undisclosed issue with a repair cost over $600.00
Green Light vehicles without a Post Sale Inspection will receive a limited guarantee per NAAA guidelines. NAAA offers 7 days to arbitrate a vehicle for flood damage and frame damage.
Exceptions to this rule are Title Arbitrations.
Yellow Light Vehicle Arbitration
If a Buyer purchases a Post Sale Inspection for a Yellow Light vehicle, they have 7 days to file an arbitration for any single undisclosed issue with a repair cost over $600.00.
Yellow Light Vehicles without a Post Sale Inspection can only be arbitrated until 5:00 pm on Auction Sale Day for any single undisclosed issue with a repair cost over $600.00
Exceptions to this rule are Title Arbitrations.
Green Light/ Yellow Light with a 7-Day Seller Guarantee
Green Light and Yellow Light vehicles with a 7-Day Seller Guarantee are not eligible for Post Sale Inspection but are eligible for a Frame Check Inspection.
If a Buyer purchases a Frame Check inspection for a Geen light or Yellow Light with a 7-Day Guarantee, they have 7 days to file an arbitration for any single undisclosed issue with a single repair cost over $600.00.
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Red Light Arbitration
Red Light Vehicles are not eligible for Post Sale Inspections but are eligible for Frame Check Inspections.
If a Buyer purchases a Frame Check Inspection for a Red Light vehicle, they have a limited guarantee to file an arbitration for particular cases.
Please refer to the NAAA Guidelines below for clarification.
Red-Yellow Light Arbitration
Red-Yellow Light vehicles are as-is vehicles and are not eligible for arbitration.
Exceptions to this rule are Title Arbitrations.
Title Arbitrations:
Late Title Arbitration
If a Seller does not provide a title within 30 calendar days of the vehicle's sale date, the vehicle is eligible for arbitration.
Title Brand Arbitrations
If a Buyer purchases a vehicle and finds the vehicle has an unannounced Branded Title, the vehicle is eligible for arbitration.
Mileage Discrepancies
If a Buyer purchases a vehicle on the block and finds unannounced mileage discrepancies on the title, the vehicle is arbitrable.
Vehicles 2013 and older are exempt from mileage arbitration.
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What Should Sellers Expect When Their Vehicles are Being Arbitrated at Big Valley Auto Auction?
Mechanical Arbitration
The BVAA Arbitration Team will inform you within 24 to 48 hours of the written submission. Then BVAA will determine the validity of the arbitration claim.
If the mechanical arbitration claim is found to be valid, the sale may be renegotiated or returned to you.
The auction may refer the vehicle to a neutral third-party mechanic shop if the issue exceeds our mechanical inspections.*
If a vehicle undergoing arbitration is not on location, BVAA may do one of two things to remedy the situation. BVAA may contact the closest NAAA auto auction to inspect the vehicle or send the vehicle to a neutral third-party mechanic shop for inspection.*
*This is at the auction's discretion.
Title Arbitration
The BVAA Title Office will contact you immediately through email and phone when a title arbitration form is received. Then BVAA will determine the validity of the arbitration claim.
If a mileage discrepancy claim is found to be valid, the sale may be renegotiated or returned to you.
If an unannounced branded claim is found to be valid, the sale may be renegotiated or returned to you.
The BVAA office will contact you immediately when a late title arbitration form is received. You have until 5:00 pm on the next day to provide a title.
If the late title arbitration form is received after 4:00 pm, you have until 5:00 pm on the second business day to provide the title.
If you can provide the tracking information of a mailed title to the BVAA office, it will be considered ‘received’, and the sale will remain a good sale.
What are the Outcomes of an Arbitration?
If a Buyers arbitration is valid, and the vehicle is returned, you will need to pay the $115.00 arbitration fee.
If a Buyers arbitration is valid, and the sale is renegotiated, you won’t need to pay the arbitration fee.
If a Buyers arbitration is invalid, the sale is considered a good sale. The Buyer will then pay the $115.00 arbitration fee for mechanical arbitrations.
How is the Outcome Determined?
If you have a title or mileage arbitration, the Big Valley Auto Auction Titles Team will audit the issue.
Mechanical arbitrations are determined by the total cost of the auction's labor rates, the time to complete the repair, and the market price of the needed part.
In the case of mechanical arbitration, BVAA mechanics will re-inspect the vehicle. Then the mechanics will determine if the vehicle was misrepresented and an issue was found to be over $600.00, in accordance with the NAAA Guidelines.
Do I Understand My Role as a Seller in an Arbitration?
In this article, you learned what qualifies vehicles for arbitration, the outcomes possible, and your next steps. Now that you know what to expect from an auto auction arbitration, you can prepare for your next steps if a claim is found to be valid or invalid. To understand each vehicle's condition, “What do the Lights Mean at BVAA?” provides an in-depth explanation for each light color offered at Big Valley Auto Auction.
Avoid arbitration by utilizing our Inspection Services.
For more information, please call us at (956)461-9000 or email us at registration@BigValleyaa.com.
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