Auction Arbitration for Wholesale Dealers

• A seller cannot use a generic announcement such as “No Arb for Oil Leaks” to avoid arbitration. Announce the specific defect, or sell the vehicle red light / As-Is.
• Ambiguous, confusing, or deceptive announcements can be grounds for arbitration. The auction decides whether an announcement is ambiguous.
• A manufacturer warranty that is still in effect does not remove the buyer’s right to arbitrate. Announcements are still required when the repair cost exceeds the guidelines’ thresholds.
• The auction makes no representations or guarantees on a vehicle. The sales contract is between the seller and the buyer. Auction management’s decision on arbitration is binding on both.

• One mechanical opportunity. The buyer gets one opportunity per vehicle to file a mechanical-defect claim. The claim can list multiple defects, but each defect must meet the threshold on its own.
• Other claims stay open. That limit does not block a separate claim for structural damage or vehicle history inside the Appendix I timelines.
• The auction inspects the first claim. It inspects the mechanical defect or defects on the initial arbitration claim.
• A price adjustment ends mechanical arbitration. If the buyer and the seller accept an auction-determined price adjustment, the buyer owns the car and it is no longer eligible for mechanical arbitration.
• The decision is final. The auction’s decision on an arbitration claim is final and binding for both the buyer and the seller.

Example (hypothetical): a $14,000 car with a $900 undisclosed transmission repair. The purchase price is under $50,000, so the mechanical threshold is $800. A $900 repair is above that line. The auction still sets the repair figure from local wholesale rates. If that figure comes in under $800, the defect does not qualify on its own. This example is not a real deal and not an auction’s fee schedule.

Some history items have longer windows in Appendix I:

• 30 days: flood damage found by auction inspection, and total loss or salvage retention by insurance records.
• 120 days: flood damage history reported by government agencies or insurance company records.
• Beyond the stated clock: total loss or salvage retention by insurance records, bonded, insurance, and salvage titles (including history), not actual miles or true miles unknown, lemon law or manufacturer buyback, grey market vehicles, and active or open theft may be arbitrated regardless of the stated time limits. A claim started after the stated period is handled under the Title Arbitration Guidelines, including the depreciation terms in those guidelines.

Appendix I is not a complete list. The code on a disclosure (A, B, or C, or a day count) is the recommended window for that item. If the buyer does not start the claim inside the time period and limits that apply, the guidelines say the claim will be denied. The vehicle must also be returned as the buyer-responsibility rules require.

• The auction may charge the buyer an arbitration claim fee.
• If the auction approves the buyer’s claim, it may charge the seller an arbitration fee, in addition to any sale-price adjustment or other charges tied to the claim.
• After a successful arbitration, the seller reimburses reasonable, documented buyer expenses. Reimbursement is at the auction’s sole discretion and is limited to commercially reasonable costs based on local auction (wholesale) repair or transportation rates.
• Lost profit, commissions, marketing, and reconditioning costs are not reimbursable.
• Repairs, reconditioning, or enhancements the buyer makes before returning the car are not reimbursed. That exception does not apply to undisclosed conditions that inspection would not catch, including not actual miles, salvage, theft recovery or stolen-vehicle status, flood damage, and lemon law buybacks.
• While the claim is pending, the buyer assumes the risk of loss and is financially responsible for any unpaid purchase price plus fees.

Log the claim fee, return transport, and any price change on the VIN so true cost per vehicle stays accurate. The six-cost walkthrough is in are you making money on each car.

• Before the bid: inspect the vehicle and review announcements, disclosures, condition reports, photos, videos, and the listing. Know which lights are on.
• After the sale: review the auction sales receipt and confirm the price, disclosures, and announcements.
• At the gate: document any damage in writing, or in an acceptable electronic format, before removing the car. Damage that is not documented at gate release is not the auction’s, facilitator’s, or seller’s responsibility if the vehicle leaves.
• On a return: bring the vehicle back as the auction directs, in the same or similar condition as its marketable condition at the sale. The auction decides that condition. The buyer carries the risk of loss until the auction receives, inspects, and approves the return.

• The seller guarantees that the title is marketable in the state where the vehicle is sold, and free of liens, encumbrances, and brands, unless those were announced.
• The title guarantee covers the current certificate and any prior certificate. It extends four years from the date of sale. Seller liability under that guarantee never exceeds the auction sale price. The guidelines reduce that maximum by 2% per month after the sale date, with the auction deciding how depreciation is applied. Liability ends four years to the day after the auction sale date.
• The seller must reassign the title directly to the buyer. Titles cannot be assigned directly to the auction or a facilitation service provider.
• The local auction sets the title-delivery timeline. Sale day is day 1. If the seller misses that timeline, the buyer may file an arbitration claim to void the sale or keep waiting for the title.
• If 90 calendar days pass, the seller still has not produced a negotiable title, and the buyer has not filed an arbitration claim to void the sale, the auction has no duty to produce the title to the buyer and no duty to pay the seller.
• A late-title claim is denied if the seller presents a valid negotiable title on the next business day (excluding weekends and auction holidays) after the local delivery period ends. A claim is also denied if the auction has already received the title or the title is in transit to the buyer.
• Neither the seller nor the auction is liable for lost profits, commissions, marketing, repairs, reconditioning, or other expenses the buyer incurs while waiting for title.
• The seller is not paid for the vehicle until the auction receives a valid, negotiable, assignable title. The seller is also not paid for a vehicle in arbitration until the claim is settled and the sale is final.

A later dealer-to-dealer sale is a different paperwork set. See the Texas dealer-to-dealer sale paperwork checklist and Texas VTR-41-A dealer reassignment.

• Age: vehicles more than 20 model years old are sold As-Is unless the seller states or represents otherwise. The current calendar year counts as year one.
• Accessories: the buyer cannot arbitrate accessories on a vehicle over 4 model years old. The current calendar year counts as year one. The guidelines’ example: as of 2026, accessories on model years 2022 and older are not eligible. Accessories are optional equipment not required for basic operation, such as entertainment systems, power windows, heated seats, navigation, and sunroofs.
• Grades and scores: the auction and the seller are not bound by vehicle grades or other scoring systems. A buyer may arbitrate undisclosed damage or defects that were present at the sale, not the grade itself.
• Wearable items: no claim for wearable items, or for wearable items that are excessively worn or inoperative. The guidelines list tires, wipers, belts, brake pads, shoes, rotors, bulbs, filters, timing belts, shocks, struts, air-ride and other suspension components, and fluids and lubricants.
• History reports alone: a buyer cannot file a claim based solely on a vehicle history report. The auction and seller are not bound by AutoCheck, Carfax, NMVTIS, or similar reports. The auction may still use those reports while it investigates a claim.
• Oil leaks: a claim for an oil leak that is not actively dripping and identifiable by visual inspection will be denied.
• Miles after the sale: local auction policy sets how many miles from the time of sale still leave the vehicle eligible.

Floor plan interest keeps accruing daily while a claim is pending. FoxDMS calculates daily floor plan interest per vehicle. See floor plan tracking and the floor plan interest calculator. Days in stock and holding cost are covered in when to sell aging wholesale inventory.

Per-dealership plans: Starter $39/mo, Growth $79/mo, Command $199/mo (see pricing). The 14-day trial requires a credit card. FoxDMS runs in any web browser, including on a phone, and there is no native app. It is available across the US. On a wholesale deal, the purchase agreement FoxDMS prints is the bill of sale. VTR-41-A prints today. Form 130-U is coming soon. QuickBooks integration is coming early 2027 and is not live. Support is email only at support@foxdms.com. Growth and Command include Priority Email Support. Wholesale dealer software is the product overview.