GMAC Financial Services now will arbitrate disputes for dealers who find previously undisclosed problems with vehicles they bought through GMAC's SmartAuction online remarketing channel -- no matter the seller.
Previously, buyers and sellers had to work out differences between themselves, with GMAC acting as a facilitator, says Mark Newman, managing director of SmartAuction.
He says the new policy, which takes effect by March 15, aims to give dealers peace of mind when purchasing a vehicle through SmartAuction, be it from GMAC, another dealer or another source.
About 20 percent of the 9,000 vehicles listed on SmartAuction on a given day are owned by sellers other than GMAC and General Motors Co.
"Regardless of the consignor, we are the trusted third party or intermediary," Newman says. "We make sure the buying customer is satisfied first. If there is any issue to be resolved with the seller, then that's our responsibility."
Steve Kapusta, director of operations at SmartAuction, says that under extreme circumstances and as a last resort, the company would consider buying back a vehicle to satisfy a customer.
Kapusta says GMAC's arbitration policy meets or exceeds the industry policy published by the National Auto Auction Association.
For example, GMAC's arbitration policy gives buyers 10 business days after the purchase to file an arbitration claim, compared with the association's recommendation of 10 calendar days.
GMAC's arbitration team reviews complaints within arbitration guidelines. Arbitration is mandatory for buyers and sellers on SmartAuction, consistent with policies at physical used-vehicle auctions.
The lender also has a special team to handle arbitration issues that are exceptions to policy rules.
For example, if inclement weather delayed a vehicle from reaching its destination and the buyer found undisclosed damage past the 10-business-day arbitration period, the special team would evaluate the situation promptly and on its merits, Kapusta says. "This enables us to do the right thing for the right reason," he says.
SmartAuction was set up in 2000 to sell GMAC-owned off-lease vehicles and GM-owned retired rental vehicles to GM dealers. At that time, GMAC was the automaker's captive finance company.
Now GMAC is an independent bank. SmartAuction is open to all dealers as purchasers and to sellers ranging from rental-car companies that handle GM and non-GM vehicles to independent auction companies and dealers.
SmartAuction sold 440,000 vehicles to U.S. dealers in 2009, about 1.5 percent more than in 2008.
The company managed the slight uptick despite what Newman says was a 60 percent drop in GM volume as a result of its bankruptcy reorganization.
Newman says GMAC's Canadian platform, which was added to his team last year, sold about 75,000 vehicles last year.
Of the 9,000 vehicles listed on the site on a given day, about 70 percent are GM brands.
Of the approximately 9,000 dealers who are registered users of SmartAuction, about 4,500 to 5,000 are GM dealers and 1,200 to 1,400 are Chrysler Group dealers, Newman says. Independent used-car dealers are the majority of the remainder.
Says Newman: "Our position is that the more diverse we can make our dealer base, the more likely we are to create a very robust marketplace."