DETROIT -

SmartAuction heard dealers clamoring for change through its own research, advisory panels and communication during the online arbitration process. The company decided something needed to be done to offset costs for transportation when a vehicle buyback occurred.

As a result earlier this month, SmartAuction made the change to its terms of use policy, so now buying dealers are reimbursed for reasonable transportation costs if an arbitration ruling stipulates a buyback is necessary.

Mark Newman, SmartAuction’s managing director, explained how the company reviews its processes carefully, and instituting this adjustment for shipping reimbursement was no exception.

“Up until this point, there were some instances where even if we agree a vehicle should be repurchased, the buyer wasn’t necessarily reimbursed for reasonable transportation,” Newman shared in an interview with Auto Remarketing this week.

“We made the policy on our site that as the trusted third party, we will ensure that the buyer is reimbursed for all buyback transactions. It’s our commitment to the buyer that they get reimbursed,” he continued. “If it’s clear, we’ll go after the seller for these costs."

As dealers know well, those transportation costs can average $300 to $500 or more if the vehicle has to be moved long distances. Leaving that cost on the books of the buying dealer didn’t sit well with Gary Zimmerman, owner of Twin Pines Auto Group of Ephrata, Pa. In fact, Zimmerman called the decision by SmartAuction “a very positive move.”

Zimmerman regularly uses SmartAuction to fill inventory for his independent store located between Harrisburg and Philadelphia.

“A dealer never buys a vehicle unless they wanted the vehicle the way it was described. If the vehicle was not as described, the dealer would have never bought it in the first place,” Zimmerman told Auto Remarketing.

“To hang the dealer with a fee for something they would have never bought in the first place had they known the real condition report always rubbed me the wrong way,” he insisted. “With SmartAuction going this way, it’s a big step for them. I know that it will make a difference for us, knowing we won’t get hung for something if the vehicle is not as described.”

Alleviating the concerns held by Zimmerman and dealers nationwide that use SmartAuction is what the company has been concentrating on for the past several months. Newman described how the vehicle transport reimbursement is the latest in a string of enhancements.

For example, Newman pointed out how well the adoption of online arbitration submissions has gone. In fact, he figures about 70 percent of all cases now are submitted through SmartAuction’s online portal rather than being taken over the phone.

“By dealers leveraging the system to file the claims, there’s a lot less manual work at our end. We’re able to reinvest some of those freed up resources into quickening turnaround time,” Newman said about the enhancement that rolled out in May.

Now with this change revolved around transportation costs, Newman believes dealers could embrace SmartAuction even more.

“It’s too early to tell, but we think this should really encourage buyers to broaden their search area for vehicles,” Newman speculated. “Buyers are telling us — given the reduced supply of used vehicles — they have to look further afield to buy inventory. So we think our policy should allow a dealer to buy with confidence over a broader search area.”