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Limited Powertrain Inspection Policy

Effective Date: 5 Aug 2024

Limited Powertrain Inspection (LPI) Policy

Section 1: LPI Guarantee

Section 2: LPI Eligible Vehicles

Section 3: LPI Ineligibility
3.1: General Ineligibility Criteria
3.2: Specific Ineligibility List
3.3: Performance Modifications
3.4: Structural

Section 4: LPI Inspected Components

Section 5: Fail, Claim, and Arbitration Conditions
5.1: Pass and Fail General
5.2: Claims and Arbitration

Section 6: LPI Inspection Methodologies & Non-Arbitrable Items
6.1: Specific Non-Material Conditions
6.2: Non-Arbitrable Items
6.3: Inspection Performance

Section 7: Resell Disclaim

Section 8: Rights Reservation

Limited Powertrain Inspection (LPI) Policy

The Limited Powertrain Inspection (LPI) is a basic powertrain only inspection that is aligned with the
National Auto Auction Association’s Arbitration Policy. LPI’s are based on the objective and subjective
expertise of Manheim inspectors.

The LPI is conducted at a point-in-time as close to the conclusion of the vehicle sale as possible. This
assessment of the vehicle is a one-time inspection conducted under the vehicle operating conditions at
that time; therefore, it is not feasible to inspect a vehicle in conditions identical to normal day-to-day
operating state. The auction has the right to engage with a third-party vendor of their choosing if a
more specialized inspection is recommended, in agreement with auction, buyer, and seller.

Section 1: LPI Guarantee

  • The Inspected Components of a vehicle that passes LPI inspection criteria will come with a 7-day
    guarantee of function or condition. A list of covered components is provided in Section 4.
  • The LPI guarantee is non-transferable and void if the vehicle is resold during the guarantee period.
  • Vehicles submitted to arbitration under an LPI must have 200 miles or less accumulated on the
    odometer between the time the odometer reading is recorded at the auction and the claim date.
  • Manheim performs these inspections on a good faith basis and stands behind these passed
    components, whether Manheim provides this guarantee directly or in agreement with the seller. If
    an inspected component is found defective during the guarantee period, Manheim reserves the
    right to remediate valid claims estimated at auction wholesale repair costs.
  • In the event of a valid claim for defect related to an Inspected Component that was not identified by
    the LPI, Manheim will reimburse expenses incurred by the Buyer (excluding profit, commissions, and
    detail charges) on vehicles arbitrated. The amount of reimbursement that qualifies under these
    guidelines will be at the sole discretion of Manheim and will be limited to reasonable and
    documented expenses at auction wholesale repair cost.
  • Notwithstanding anything herein to the contrary, the seller remains liable for issues that fall under
    required disclosures and timelines as per NAAA and Manheim Marketplace policies. Therefore,
    arbitration with the seller may occur as this policy does not protect or absolve the seller from their
    responsibility to properly disclose their vehicles.

Section 2: LPI Eligible Vehicles

The following vehicles sold through Cox Automotive U.S. Marketplaces are eligible for LPI:

  • Green light vehicles (Ride & Drive) equal to or greater than 125,000 miles
  • Green & Yellow light vehicles (Ride & Drive with Caution) equal to or greater than 125,000 miles
    • Items disclosed by the seller will not be inspected and/or guaranteed under LPI
  • Yellow light vehicles (Limited Guarantee)
    • Items disclosed by the seller will not be inspected and/or guaranteed under LPI
  • Vehicle Purchase Price over $3,000

It is at the auction’s discretion to make the determination if the vehicle is eligible for LPI.

Section 3: LPI Ineligibility

3.1: General Ineligibility Criteria

The following vehicles sold through Cox Automotive U.S. Marketplaces are ineligible for LPI:

  • Vehicles sold under Green Light with mileage under 125,000
  • Vehicles sold under Green & Yellow Light with mileage under 125,000
  • Vehicles sold with a price of $3,000 or under
  • Vehicles sold with purchase price or with an estimated MMR above $75,000
  • Vehicles sold in the TRA sales lane, Specialty Sale units, Motorcycles or sold under Yellow light
    (Limited Guarantee)
  • Vehicles sold As-Is or deemed automatic As-Is per NAAA policy and Manheim policy
    • Kit vehicles
    • Recreational vehicles
    • Watercraft
    • Homemade vehicles
    • Vehicles with major modifications (including items in Sections 3.3 and 3.4)
  • Vehicles 20 years or older (Antique vehicles)
  • Vehicles that have been removed from the Manheim facility
  • Vehicles past purchase windows below:
    • 5 PM for auctions that start prior 9:30 AM
    • 3 hours post auction end for all other auctions
    • 3 hours post acceptance on if bids
    • 24 hours after vehicle purchased on OVE
  • OVE offsite vehicle purchases not transported to a Manheim facility for processing
  • Vehicles with branded titles or defects that are eligible for a branded title, including, but not limited
    to: flood damage, salvage, rebuilt, lemon-law or trade-assist buybacks, TMU, et al.
  • All electric vehicles
  • Heavy Duty Trucks & Heavy Equipment categorized in Class A and B with Gross Vehicle Weight
    Rating (GVWR) of 26,000 pounds or heavier

Box trucks, such as:

‒ Delivery drivers
‒ Couriers
‒ Furniture delivery

Trailers:

‒ Tractor-trailers
‒ Tractor-trailer buses
‒ Truck and trailer combinations
(Double and triple trailers)
‒ Livestock carriers

Large buses, including:

‒ City buses
‒ Tourist buses
‒ School buses
‒ Segmented buses

Trucks:

‒ Straight trucks
‒ Dump trucks with small trailers
‒ Flatbeds

Tanker vehicles

Current or former armored and/or military /
national defense vehicles

3.2: Specific Ineligibility List

  • Exotic and/or handmade vehicles (including but not limited to):

AMC H1

Dodge Viper

Mercedes G Wagon

Acura NSX

Ferrari

Mercedes SLR models

Aston Martin

Fisker

Mitsubishi Lancer Evo

Audi R8

Ford GT

Nissan GT-R

Bentley

Lamborghini

Panoz

BMW Alpina

Lotus

Porsche 911

BMW i8

Maserati

Rolls-Royce

DMC 12

Maybach

Subaru WRX

Dodge Demon

McLaren

Tesla

  • Vehicle makes that average an annual production rate at or below 4,000 vehicles within the three
    most recently completed production years

3.3: Performance Modifications

Per section 3.1, vehicles with certain modifications are ineligible for PSI. Examples of certain
modifications include but are not limited to:

  • Modifications that impact the safety of the vehicle
  • Computer and electrical modifications
    • Including but not limited to computer chips and tuners
      • These modifications will deem a vehicle ineligible for PSI
      • If found during the inspection all portions modified and or related to the
        modifications will cause the inspected vehicle to fail the PSI
  • Physical parts modifications
    • Including but not limited to turbos, catalytic converter deletes and/or replacements, and
      EGR deletes, high performance or racing alterations
      • OE/OEM approved modifications will not affect the eligibility of a vehicle for PSI
      • Non-OE/OEM approved modifications are deemed ineligible for PSI
  • If found during the inspection all portions modified and or related to the
    modifications will cause the inspected vehicle to fail the PSI
    • Inoperable, missing, or altered emission control equipment components that change or
      disable its function as intended by the manufacturer will cause a vehicle to fail PSI

3.4: Structural

Structural damage and/or alterations must be announced at auction per NAAA guidelines.

3.4.1: Structural Damage

Definition (per NAAA guidelines): Damage to the structure or a specific structural component of the
vehicle. Often referred to as frame damage, although it also applies to Unibody and Unibody on Frame
structures in addition to Conventional Frame.

  • All structural damage must be announced via seller disclosure
    • A vehicle with announced damage is eligible for LPI
      • Announced damage is not a condition for LPI failure
      • Announced damage will not be protected under LPI coverage
    • Unannounced damage discovered during the LPI will cause the inspected vehicle to fail LPI

3.4.2: Structural Alteration

Definition (per NAAA guidelines): An alteration to the vehicle’s structure including a lengthened or
shortened frame, a modified suspension, or the installation or removal of after-market accessories.

  • All structural alteration must be announced via seller disclosure
    • A vehicle with announced alteration is eligible for LPI
      • Announced alteration is not a condition for LPI failure
      • Announced alteration will not be protected under LPI coverage
    • Unannounced alteration discovered during the LPI will cause the inspected vehicle to fail the
      LPI

Section 4: LPI Inspected Components

The items checked within the performance of the LPI are:

  • Transmission engages and functions
  • Engine function and operation
  • Drivetrain
    • 4×4 system engagement
    • Differential engagement
  • Structure checked

Advanced Driver Assist Systems (ADAS) are not inspected as part of LPI. Per NAAA guidelines, these
systems must be inspected by a qualified 3 rd party outside the auction property.
These systems include but are not limited to the following:

  • Rear camera
  • Rear parking sensors
  • 360 camera systems
  • Blind spot detection
  • Lane departure warning
  • Adaptive cruise control
  • Collision warning
  • Lane keep assist
  • Backup Assist
  • Autonomous driving function

Section 5: Fail, Claim, and Arbitration Conditions

The LPI purchase is subject to the following:

  • The buyer is responsible for the LPI fee regardless of vehicle pass or fail
  • The sale of the vehicle is NOT contingent upon the availability of the LPI
  • LPI failures are determined by NAAA arbitration policy and follow the NAAA repair or replace
    threshold for in-lane purchases

5.1: Pass and Fail General

  • The auction will make the final determination if the LPI is deemed a pass or fail
  • A failed LPI results when the inspected components of a vehicle meet NAAA Arbitration Policy
    criteria or state or local government safety regulatory criteria, or Manheim policy criteria, which
    make the vehicle eligible for arbitration. In such event:
    • The Buyer has the option to enter the arbitration process and:
      • Complete the transaction on mutually agreeable terms with the seller with the sale
        completed as “Buyer Bought”
        • Per NAAA Arbitration Policy: “If price adjustment is made and accepted,
          vehicle becomes “As-Is, No Arbitration” property of the Buyer, and is not
          subject to any further arbitration. The auction management makes the
          binding decision upon both the Buyer and Seller on all arbitration matters.”
      • Or, complete the transaction with the vehicle in its current state and under no
        negotiated terms with the seller
        • To align with NAAA Arbitration Policy, in this case the vehicle becomes “As-
          Is, No Arbitration” property of the Buyer, and is not subject to any further
          arbitration.
      • Or, void the transaction, with the sale being unwound as “Buyer Withdrew”
    • A vehicle that fails LPI and results in a “Buyer Withdrew” status will move back into seller
      inventory. If the seller decides to re-run the vehicle in a future auction, the seller is required
      to repair the vehicle or make the appropriate announcements.

5.2: Claim and Arbitration

  • For vehicle purchases, a defect on a vehicle for which LPI was purchased and “passed inspection” is
    eligible for claim resolution if:
    • A defective component or condition is found within the guarantee period, based on the
    • A defective component or condition is within the scope of the inspection criteria;
    • A defective component or condition is estimated to cost at or above the NAAA Arbitration
      Policy threshold to repair or replace, with the estimate based solely on Manheim’s
      wholesale cost.
  • For defect states noted above, the defect must be eligible for claim resolution with Manheim and
    Manheim reserves the right to remediate the claim. Eligible claims are based on arbitral items noted
    in the NAAA Arbitration Policy.
  • Any claim for arbitration under the LPI must be submitted within the guarantee timeframe
    purchased (defined as the time between the date of completion of the LPI and the date of claim). If
    a vehicle return is required, the vehicle must be returned within the stated deadline established by
    the facilitating location in the same or better condition as when sold.
  • Manheim retains the option to assume ownership of a vehicle at a maximum of 102% of MMR

Section 6: PSI Inspection Methodologies & Non-Arbitrable Items

6.1: Specific Non-Material Conditions

Certain temporary or non-material conditions will not qualify an inspection for failure, such as:

  • Vehicle scanners returning Yellow (if reason is known)
    • Yellow refers to an indicator light associated with an OBDII scanner that suggests:
      • A previously active code(s) cleared prior to inspection
      • A code(s) not active at the time of inspection
  • Leaks, noise and other items that are generally considered inherent to an inspected vehicle

6.2: Non-Arbitrable Items

  • Inherent conditions based on year, make, model
    • Determination will be made using NHTSA.gov, manufacturer guidelines, and other resources
  • If the vehicle is purposefully modified after it leaves the auction location, which cause changes to
    the vehicle’s condition from the time of inspection. Such changes will void the LPI guarantee.
  • Options, accessories, or any items not included in standard base equipment on OEM make model
    trim of the vehicle being inspected
  • Wearable Items
    • Definition (per NAAA guidelines): defined as parts of the vehicle that the manufacturer
      recognizes the need for replacement/adjustment during the expected life of the vehicle
      driven the average miles per model year (15k). These items are normally identified in the
      Owner’s Manual for routine check and replacement.

All Suspension

‒ Struts
‒ Coil/ Leaf Spring
‒ Etc

Trailers:

‒ Pads
‒ Shoes
‒ Rotors
‒ Etc.

External engine components

‒ Belts
‒ Hoses
‒ Etc

Misc

‒ Ball joints
‒ Bushings

Items with manufacture defined life
expectancy

  • Fluids/ lubricants
  • Wipers
  • Tires
  • Subject to change based on related changes to the marketplace

6.3: Inspection performance

Manheim performs its inspections based on NAAA and industry best practices, with the following
caveats in mind:

  • OEM-installed under body cladding will not be removed from the vehicle;
  • Vehicles may not be driven at speeds high enough to simulate all driving conditions;
  • Vehicles will not be driven for long durations to simulate extended driving conditions.
    Note that buyers of LPI are encouraged to discuss the results with the LPI facilitating location

Note that buyers of LPI are encouraged to discuss the results with the LPI facilitating location

Section 7: Resell Disclaim

If arbitration results in a sale being unwound based on a failed LPI, the seller shall either repair or
disclose the results of the failed LPI when re-running the vehicle at Manheim. Failure to do so may
result in seller being held responsible for reimbursement of any subsequent failed LPI for such vehicle

Section 8: Rights Reservation

Manheim reserves the right to modify, alter, discontinue or terminate this policy at any time for any
reason whatsoever, with or without notice. In addition, Manheim reserves the right to decline to offer
this service to any person or entity at its discretion.