DirectInspect

VEHICLE INSPECTION GUIDELINES

(Revision Date: April 21, 2010)

INSPECTION PROCESS OVERVIEW: All vehicles must be inspected in a consistent, uniform manner by dealership personnel trained to recognize and record normal and excessive wear, as outlined in the Excess Wear Table (available on the Vehicle Inspection Website). In addition, responsible dealership inspectors must be versed in detecting and describing previous repairs and structural damage, as the selling dealer is completely responsible for full and accurate disclosure in this regard. Finally, good use of special notations/comments is critical in further describing vehicle conditions, which will help to sell the vehicle and avoid potential buyback situations. Important: On SmartAuction, vehicles are made available for sale to multiple parties on the Internet. Therefore, the ability to provide highly accurate and detailed Inspection Reports with photos is expected, and must be emphasized to all involved in the final processing of dealerowned vehicles being offered for sale on SmartAuction. INTERIOR INSPECTION: 1. Missing, Broken and Replaced Parts (also applies to exterior): Missing parts such as van seats, 3rd row seats, convertible top boots or airbags must be recorded and priced for replacement with original equipment or parts of equal quality and design. Broken parts must also be recorded and priced for replacement if they cannot be repaired to manufacturer's specifications. 2. Damage to Interior Soft Trim and Carpets: Cuts and tears: All cuts and tears must be disclosed regardless of size or number of occurrences. Also see Note below. Chargeable items will only be stains requiring replacement of upholstery or carpeting. Any removeable stain must be disclosed, but is considered non-chargeable. All burns must be disclosed regardless of size or number of occurances. Use good judgement. For seat cushions and leanbacks, estimate labor @ 2.5 hours per stitched panel, up to replacement cost.

Stains:

Burn holes:

Singed areas (if unsightly):

Note: Damage to trim panels, in most cases, requires replacement. If trim panel has carpet insert, and damage is confined to carpeted area only, price for repair. 3. Perform Full Function Check of All Equipment: Pay particular attention to S.I.R. and A.B.S. lamp functions. Missing or inoperable items along with any items showing excess wear are to be noted and priced for replacement on the Inspection Report. Provide photo if necessary (see Photos).

4. Malfunctioning Systems or Components: Systems that do not operate properly must be recorded as chargeable damage and priced accordingly for repair or replacement. For models equipped with a Navigation System, the complete set of CDs (where applicable) must be present or disclosed at full wholesale replacement cost. 5. Cargo Area SUVs / Pickup Truck Beds: Reasonable allowances (based on good judgement), should be made for the cargo area of sport utility vehicles or pickup truck beds, as long as the condition does not detract from the vehicle's overall appearance and value. If there is any question about the overall condition of the cargo area (including pickup truck beds), the condition should be clearly described in the Comments sections of the Inspection Report and at least one photo of the area should be provided. 6. Window Tinting: After-market window tinting should be disclosed in the Options & Accessories and/or Comments sections of the Inspection Report. Cases of poor-quality aftermarket window tinting should be recorded as chargeable, with the estimated cost of removal provided.

EXTERIOR INSPECTION: A complete inspection of the vehicle exterior is required, including noting any conditions to the under carraige, underhood and trunk/cargo interior. Damage is considered chargeable under Excess Wear Standards when any one panel requires more than $100 of body/paint repairs using traditional body shop repair methods. (Also see Photos.) Important: Poor prior repair significantly affects the value of the vehicle and, therefore, must be recorded and described in detail on the Inspection Report. 1. Existing Body Damage: All Individual occurrences of body, bumper or molding damage (dents, dings, chips, scratches) must be recorded and priced appropriately, according to Excess Wear Standards. Scratches that have not penetrated the base material and will buff out during reconditioning are normal wear and are to be priced accordingly. 2. PDR: Paintless Dent Repair (PDR) methods are allowed and, where necessary, should be recorded as normal wear. 3. Previous Repairs: All previous repairs must be noted on the Inspection Report. Commercially acceptable repairs are defined as those having good color match and texture. There should be no visible sand/grinding marks or excessive overspray. Any repair not meeting these standards must be completely described and priced on the Inspection Report to repair (rework) the vehicle back to commercially acceptable standards. Special remarks in the Comments section of the Inspection Report should be used to describe previous repair conditions that require rework. 4. Existing Structural Damage: Must be noted on the Inspection Report and priced for repair/replacement to factory standards. 5. Structural Repairs: All structural repairs must be recorded on the Inspection Report. If the inspector determines that the repairs are inferior and compromise the structural integrity of the vehicle, the Inspection Report must reflect the necessary charges for replacement/repair of that/those components.

6. Mechanical Damage: Must be disclosed and priced as appropriate on the Inspection Report. Obvious mechanical issues would include any engine warning lights, engine knock, etc. Mechanical issues must be itemized in the Damage Info section of the Inspection Report, with a detailed description of the issues provided in the Comments section. 7. Front/Rear Bumpers, Body Side Moldings, & Wheel Openings: Bumpers, moldings and wheel openings that are buckled, bent, deeply scraped, gouged or missing are considered chargeable damage if repairs/replacement exceeds $100. 8. Convertible Tops, Padded or Vinyl Roofs: Structure must be operational and not damaged. Stains that cannot be removed, cuts, and burns must be completely described and priced for full replacement. 9. Wheels: Wheels / wheel covers must be original equipment, unless otherwise disclosed. Badly scratched, broken, bent or missing wheels or wheel covers affecting driveability or passenger safety must be noted as chargeable and priced accordingly on the Inspection Report. 10. Tires: All tires must have a minimum 4/32 (1/8) inch tread remaining across any part of the tread regardless of mileage, including the spare. Any tire with adequate tread and matching manufacturer's recommended guidelines is acceptable, regardless of make, as long as properly disclosed on the Inspection Report. In other words, tires are not required to match manufacturer, provided there is adequate tread depth and they match in size and specifications recommended by the manufacturer. Gouges, cuts, sidewall plugs or tires having a condition that affects passenger safety must be disclosed and priced for replacement on the Inspection Report. 11. Lens / Lights: All lights must be operational. Cracks or any hole in headlights, taillights, turn signals, running lights, and coach lamps must be disclosed on the Inspection Report. 12. Windshield-Glass Damage: All glass damage must be disclosed, including minor chips or and sandblasting. Etched glass, unless done for the purposes of identfying the vehicle (e.g., VIN etching), must be recorded chargeable damage and priced at replacement cost for the glass. PHOTO(S) REQUIRED. Note: Damage to windshields require that the inspector circle the damage with a white crayon or grease pencil, take photograph, and provide comments referencing the location and dimension of the damage. Ex: WS bullseye @ upper left, 1/2" dia. 13. Original Equipment and Accessories: All original equipment and accessories are required to be present on the vehicle. All missing parts (such as body side moldings, wheel covers, trim rings, spare tires, jacks and wheel wrenches) are to replaced and must be original equipment or parts of equal quality and design. Because, in some cases the inspector will not know what original equipment and accessories were present on the vehicle when new, the following accessories must be noted if present. Space is provided on the Inspection Report for these items. Tinted Windows-After Market Alloy Wheels-After Market Tow Package Sunroof-After Market Alum. Wheels-After Market No Radio Running Boards-After Market Chrome WheelsAfter Market Radio-After Market Rear Spoiler-After Market Remote Starter SpeakersAfter Market Faux Convertible Top Alarm-After Market CD Changer Plastic/Vinyl Bed Liner Cargo/Tonneau Cover VCR Player Spray-On Bed Liner Bed Topper Onstar

14. Keyless Remote Key Fob: Missing key fobs must be noted and priced for replacement. 15. After-Market Alterations: Often after-market alterations can enhance a vehicle's appearance / performance. They can also just as easily detract from the overall appearance / performance of a vehicle. Appropriate notations must be made for items such as vinyl or simulated convertible tops, wire wheels, window tinting (see Interior Inspection item 6.), suspension modifications, paint graphics, lettering, etc. 16. Convertible Boot: Missing convertible top boots must be noted and priced for replacement. 17. Spray on Bed Liner: The addition of a sprayed-on bed liner is not considered chargeable damage and should not be noted as such, unless poorly installed (overspray, uneven texture, etc.) or damaged (deep scratches, missing sections, etc.); however, remarks should be made in the Options & Accessories and/or Comments sections of the Inspection Report to disclose that this type of liner exists. 18. Graphics / Signage: Graphics on glass and body panels should always be disclosed and recorded as chargeable damage. Any painted signage should also be disclosed and estimated for a full panel repaint for each panel affected.

PHOTOS: The photographer should arrange to position the camera so that the maximum or most descriptive view is attained. Also be conscious of the position of the sun with respect to reflections and glare off body panels and windshields. 1. Required Photos: A minimum of three (3) digital photos are required for each vehicle inspected. All vehicles require an angled, overall view of the left front (drivers side) and the right rear (passenger side). Additionally, Vehicles with no chargeable damage also require a photo of the most severe nonchargeable damage item. Vehicles with chargeable damage also require a photo of any chargeable damage item exceeding $100. In addition, ALL chargeable windshield damage MUST be circled with a white crayon or grease pencil and photographed (see WindshieldGlass Damage). 2. Additional Recommended Photos: In addition to the above-required photos, the following photos are recommended to help sell the vehicle. Wheels Provide a good view of the design and material of the wheels currently on the vehicle. Tires Provide a good view of the tread depth typical of the tires on the vehicle Drivers seat and floor area Provide a good indication of the overall condition of the interior. Seating configuration Provide a good view of the rear seating configuration for vans. Dashboard w/odometer reading Provide a good clear picture of the true mileage of the vehicle. Note: Wheels and tires can be combined into a single photo.