Does the auction play favorites?
It may seem like the auction capriciously selects which rules they follow and which rules they don’t, but rest assured, there is a kind of logic to the way the second section of the NAAA is used. Since we are all savvy professionals, I will assume we have all read this section (I mean, I hope we’ve all read it…)
We can all agree that the concept of a car auction came about to “smooth” the process of dealers selling cars to each other, to create a larger marketplace for sellers to list their vehicles, and to protect buyers.
The auction exists to do three things:
Ensure the sale is “fair and ethical” (see related post)
Provide a marketplace to maximize investment
Process payments & titles
Everything else is fluff. Unfortunately, or fortunately depending on where you stand, the “fluff” has a lot to do with how clients experience the auction and directly impacts whether buyers or sellers continue with an auction or try others.
Have you ever been in a situation in arb where you felt like the buyer or seller was getting an unfair advantage due to their size or relationship to the auction? Technically that should never be true because the NAAA says the auction is independent of the sale, right? The reality is, as clients take advantage of the auction’s additional services, the value of those clients climbs beyond just the buy and sell fee. This can and does put the auction in a position where, in a complicated dispute, they will step in and shoulder some or all liability in order to create a good client experience and to not risk losing a valuable book of business. If this has happened to you, rest assured that the auction has to take liability. That is, unless they can prove the liability should lie elsewhere, which they are very experienced at doing.
This should never mean that an invalid claim is made valid and put back on the seller, or vice versa, and in my experience that generally was not the case when the auction did step in. The auction will review the facts of the claim and determine if it is valid or invalid regardless of the parties involved, and only use the buyer or seller information after the validity check. Even when they are looking at the buyer or seller, that should not change the outcome of whether the claim is valid. As the rules are written, that information is only to assist in designing a resolution that will either be a win-win, or if that can’t be managed, at least a resolution with the least amount of pain for all parties.
Does it play out this way in real life? As with everything in life, that answer is complicated. Sometimes when something is close to valid, but not quite (buyer went 4 over mileage limit, cost to repair is $799, issue was listed on CR but not announced, etc) the relationship between the auction, the buyer, and the seller can push the auction to call a claim in one direction or the other. Sometimes, the buyer or seller’s relationship with the auction is such that the auction assumes one or both parties are guilty until proven innocent. Other times, and these are my favorite cases, the auction has “unspoken” rules that they have been using for ages but that have no basis in policy.
So, does the auction play favorites? Yes, sometimes, but maybe not in the way you think they do.
If you are facing a claim like this, where the outcome seems to be relationship -based rather than fact-based, I can help.
