Sample diminished value of oregon dv appraisal by ken nix

DIMINISHED VALUE OF OREGON Independent Oregon Auto Appraiser Ken Nix - # V34-075

Motor Vehicle Loss of Value Report OWNER

Carlos Cordeiro

REPAIR FACILITY

Precision Body & Paint Inc.

DATE OF LOSS

August 03, 2016

USED CAR MARKET

Pacific Northwest

VEHICLE

2016 Volvo XC90 T6 - RDesign 4D SUV AWD

VIN

YV4A22PM3G1077370

PRE-LOSS CONDITION

Very Clean

MILEAGE AT LOSS

2,537

DAMAGE ASSESSMENT AIR BAG DEPLOYMENT?

COST OF REPAIRS

$18,259.90

PREVIOUS ACCIDENT?

FRAME/STRUCTURE LABOR?

YES

Loss Of Value (LOV)

$16,516.00

Graph and Trend Line Of Comparable Vehicles Sold At Auction:

www.DiminishedValueOfOregon.com 4264 SW PLUMERIA WAY •BEAVERTON, OR. • 97078 Phone: (503)649-9993 • Fax: 888-343-3317 The contents of this document shall be treated as intellectual property and the report, part, verbiage and/or process cannot be copied, reproduced, erased, modified, cloned, duplicated and/or used in any legal proceedings without Ken Nix’s written consent.

Diminished Value Worksheet CONDITION: Months Since Loss

Extra Clean

Appraiser's Adjusted Opinion

Preloss

Pre-loss AVG Sale To Auto Dealer

Black Book Wholesale Value Black Book Wholesale Value AVG Sold Wholesale Value Adjusted SOLD Wholesale Value to Averaged Wholesale Value Black Book 24 Month Value Trend

Extra Clean Average

$51,500.00 $47,850.00 $49,000.00 Extra Clean $52,650.00 $52,075.00 2014 $0.00 2016 $0.00 $0.00 Total Historic Adjustment Averaged Dealer Actual Cash Value @ Time of Loss $51,775.00

Post Repaired AVG Sale to Auto Dealer$35,259.00 Adjusted Loss Percentage 31.90% LOSS OF VALUE $16,516.00 Reconditioning Incidentals Total Recon Adjustments Monthly Historic Adjustment

Post Repaired PRE-LOSS Average (AVG) sale to dealer Base Damage Modifier Luxury Modifier Performance Vehicle Modifier Primary Family Vehicle (Family Vans, Wagons) Pickup or Utilitarian Vehicle Modifier Hybrid / Electic Collectible / Classic / Unique Super Car Convertible Prior Accident(s) (NO STRUCTURAL OR FRAME LABOR) Accident Reported To Carfax/ Autocheck In Addition To Base High Demand Modifier Low Demand Modifier Adjusted Post Repaired Trade-In ACV Loss Percentage Diminution of Value Modifier

TRUE FALSE TRUE FALSE FALSE FALSE FALSE FALSE

FALSE FALSE FALSE FALSE

$51,775.00

51,775.00 0.28600 0.02048 0.00000 0.01762 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 34,994.97 32.41% 16,780.03

Base Damage + Repairs Modifier 1 Less than $500 in Repaired Cosmetic Damage (No Collision Claim Filed) Repaired Cosmetic Damage > $500 < $1,500 cost of repairs (Minor) Repaired Cosmetic Damage > $1,500 cost and < $2,500 (Moderate) Cosmetic Damage in excess of $2,500 (or 3 or more body panels affected) Accident Reported To Carfax/ Autocheck Setup and Measure (Laser only) Structural / Frame labor or damage (includes setup and measure on frame machine) Air Bag Deployment Structural / Frame Repairs or damage + Air Bag Deployment Buyer Demand Modifier Luxury Vehicle Performance Vehicle Primary Family Vehicle (Family Vans, Certain SUVs, Wagons) Pickup or Utility Vehicle (NOT SUV) Hybrid / Electic Collectible / Classic / Unique Super Car Convertible Prior Accident(s) Accident Reported To Carfax/ Autocheck In Addition To Base High Demand >75% VDI (Vehicle Demand Index) Low Demand < 25% VDI (Vehicle Demand Index)

0.0716 0.0561 0.0616 -0.0582 0.0765 0.0955 0.075 0.055

-0.1956 0.095 -0.0042 0.016

$150 $150 $300 $0.00

CERTIFICATION Certification Terms and Conditions • • • • • • • • •

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The methods and calculations used in this report are the unbiased opinion of an Oregon State Certified Appraiser License # V34-075. This report was provided at the request of Carlos Cordeiro, of their own free will and was not solicited for any predetermined reason. The analysis, opinions and conclusions were developed based on the automotive experience of Ken Nix. Ken Nix and/or any associated companies, web sites or employees assume no responsibility for the final settlement amount between Carlos Cordeiro and any defendant or insurance company. The fee for this report is not contingent upon any value reflected in the report, and is charged solely for the purpose of compensating the appraiser for his time, energy, costs and expenses associated with providing this report. Ken Nix assumes no liability for any errors or omissions in this report, or latent or manufacturing defects which may affect the performance, safety or value of the vehicle. No Part of this report is to be considered legal advice. Numbers in this report may have been rounded to the nearest dollar amount. Ken Nix owns the copyright to this document which includes proprietary verbiage and it cannot be duplicated and/or used in any legal proceedings including arbitrations and/or court unless Ken Nix gives expressed written permission to allow its use for a specific reason. The appraisal fee does not include any additional written or court associated services after the appraisal’s completion. The appraiser is not required to attend hearings/court without prior agreement and without compensation of additional fees for any additional services. Any additional services beyond this report are billed at an hourly rate and must be requested in writing by our client and/or client’s council. The fee for the appraisal does not include any additional services such as court testimony, depositions, revisions associated with prior damage, etc. These services are available for an additional fee. Some information may have been based on documentation provided by the person requesting this assessment, which we believe to be consistent, true and have no reason to doubt. Ken Nix reserves the right to recall his report and amend for any reason.

The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation has been paid before starting this assignment and is for completing this assignment and is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. I The appraiser may not have made a personal inspection of the vehicle, which is the subject of this report. According to USPAP ADVISORY OPINION 2 (AO-2), It is the appraiser who is to determine the appropriate degree of inspection necessary to produce credible assignment results. No one provided significant appraisal assistance to the person signing this certification.

I certify that, to the best of my knowledge and belief that, the information, opinions and conclusions included in this report are true and accurate. I have based my conclusions on the research I have conducted on this vehicle in regards to diminished value, also known as diminution of value. In my professional opinion, I have come to the conclusion that the subject vehicle has suffered an Inherent Diminution in Value of $16,516.00 USD based on fair market value, due to a collision loss on August 03, 2016 after all repairs have been completed. SIGNED THIS DAY, May 18, 2017. This document is considered void without appraiser’s signature

X Kenny Paul Nix –Certified Motor Vehicle Appraiser License # V34-075

Purpose, Scope and Use of this Report The purpose of this report is to provide an answer to the problem of determining loss of fair market value sustained by the subject vehicle following the repair of collision damages suffered on August 03, 2016. Vehicles that are involved in a collision almost always suffer a loss in market value due to not only the general perception that vehicles with an accident history are in some way defective or more likely to present future problems with electrical, wear and tear, or safety related issues, but also that a vehicle’s structural integrity and/or safety system may have been compromised due to the damage and/or subsequent related repairs. Fair Market Value as Used in This Report Fair Market Value is a loosely used term in the automotive industry and legal profession to describe infinite variations of the value of a vehicle. In this report we have used The US Supreme Court definition of “Fair Market Value” as: “The price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. United States v. Cartwright, 411 U. S. 546, (1973) (quoting from U.S. Treasury regulations relating to Federal estate taxes, at 26 C.F.R. sec. 20.2031-1(b)). As a licensed appraiser, I feel this is the most credible definition and have applied these standards to my report. Appraisal Standards Uniform Standards of Professional Appraisal Practice was used in preparation of this report. These standards have been endorsed and adopted by major appraisal organizations in the United States and the Great State of Oregon. Scope The scope of this appraisal assignment is to establish a set of professional opinions and conclusions as to the Fair Market Value of the subject vehicle based on the appropriate market, immediately prior to the time of loss and the Fair Market value of the same vehicle immediately after the damage repairs are completed and to document and quantify the loss of value the subject suffered due to the loss on August 03, 2016 and to report my observations and opinions. Market According to the Uniform Standards of Professional Appraisal Practice (USPAP) Standard Rule 7-3 (b), an appraiser must define and analyze the appropriate market consistent with the type and definition of value. The appraiser must recognize that there are distinct levels of trade (measurable marketplaces) and each may generate its own data. A vehicle may have a different value at a wholesale level of trade, retail level of trade, trade in value, etc. The fair market value of an item of property is not to be determined by the sale price of that item in a market other than that in which such item is commonly appropriate. In this instance, we have to first identify what markets that a vehicle that is comparable in like, kind and quality

to a 2016 Volvo XC90 T6 - R-Design 4D SUV AWD, being sold by a private owner, would be commonly sold in. I was able to identify several markets that consumer owners would normally sell their private vehicles comparable to the subject vehicle in. The markets are described as: • Private Party Sale to the General Public. Although this would be the optimum way for an owner to sell their vehicle, it is also the most time consuming and selling a car privately can take weeks, even months if the vehicle isn’t in demand. The owner will have to be available to take test drives with prospective buyers, which leads us into the question of security of showing the vehicle. Prospective buyers will question the accident history, service history, minor damage, etc. Once someone is interested enough to make an offer, then there is negotiating the price and the question of financing, paperwork, and even possible warranty issues to attend to. Due to these factors, private party sales to the open public, of vehicles under 7 years old with less than 100,000 miles account for no more than 30 percent of the private owner used car sales market overall. • Private party transactions between friends, family, and associates. This is a market where true numbers are unknown. This is where the vehicle is either sold to a fried, family member, or business associate. Many of these vehicles are passed down to family members. It is estimated that this type of transaction accounts for 10 to 15 percent of the private owner used car sales market overall. • Consignment. This is a very small market that normally accounts for less than 1% of the private owner used car sales market. • Retail Sale. This market is not appropriate as it reflects sales by automotive dealers, not by private owners. Based on the responses from the vehicle’s owner, I’ve determined they do not hold a Automotive Dealers License. Since the scope of this appraisal is to determine the loss of value the owner has suffered due to inherent diminution of value, this market would not qualify as it would make up zero percent of the private owner used car sales market overall. • Sale to Auto Dealer. According to Edmunds.com, the number of vehicles traded-in to dealers has been rapidly growing with 47% of all new car sales involving a trade-in. Note, this does not include trade-ins to used car dealers. Trade-ins from consumers to dealers conservatively make up more than 50% of the private owner used car sales market with a speculative market share of over 65% of consumer owner sales. Normal trade-in situations are based on 2 separate transactions: 1. Sale of the private owner’s vehicle to the dealer. 2. The Sale of a Dealer’s Vehicle to a private owner. After reviewing this data, I arrived at the conclusion that the largest market for a private owner’s sale of a 2016 Volvo XC90 T6 - R-Design 4D SUV AWD was directly to auto dealer. References and Research Sources In the course of preparation of this diminution of value report, we may consult with various other sources and associates, including but not limited to, Black Book, Kelley Blue Book (KBB), NADA, Manheim, NAAA Auto Actions, Carfax, Autocheck, New and Used Automotive Dealers, and other organizations, companies, guidebooks, publications and texts. Any information obtained from these sources will be considered reliable and credible and may be relied upon, and become a part of the opinion, conclusions and facts contained in this motor vehicle valuation report. When determining the loss of value, many factors are taken into

consideration. These may include, but are not limited to demand, supply, type of vehicle, vehicle equipment and color, market fluctuations, and equipment. Since many of the same stigmas affect the majority of vehicles, an electronic template has been used in the majority of our appraisals to reduce errors on redundant documentation. All vehicles are evaluated on their individuality based on color, condition, engine, transmission, powertrain, equipment and any other unique traits they may have.

PHYSICAL INSPECTION The subject vehicle’s condition is normal for the year, miles and model. Under close inspection, even front line ready retail comparables may require some reconditioning, maintenance and interior/exterior detailing. The subject vehicle has a nice marketable color, with a high gloss paint finish. The body panels are in excellent condition with no door dings, chips or damage. The Windshield and other glass had no signs of pitting, scratches, chips or breaks. The tires were all the same type and had approximately 95+ percent tread and marketable. The interior is in excellent condition with no signs of wear. The equipment was in excellent showroom condition. The Headliner has no stains, wear or damage. The Front Seats are in like new condition and the leather is in excellent pliable condition. Second row seats are in excellent condition The Carpets are in excellent condition with no signs of stains and/or wear. The left rear door panel has a very minor scuff on the bottom kick panel. The vehicle had normal debris from the weather from a few days before such as small amounts of grass and dirt. The third row seats appeared to have never been used and were in excellent condition. The Mat covering the normally folded third row seats was a little scuffed from use, but overall the interior was in excellent condition except for minor cleaning. In determining the possibility of prior damage, I check bolts and nuts for broken paint and/or tool marks, I look for paint overspray and check the overall vehicle for paint thickness using a paint meter. I also check the consistency of the tolerances between body panels with a caliper. During the inspection, I run an 8.5mm x 5 meter borescope into the inner panels to look for any signs of prior damage and/or bad repairs. I found no signs of prior accidents to the vehicle. There were signs left from the repair to the vehicle related to the loss on August 3, 2016 including tool marks and broken paint on many of the bolts and nuts related to the repairs. It would be very easy to tell this vehicle had been in a severe accident which required the rear hatch to be removed. The engine appears well kept except for normal accumulated dust in the engine compartment. Overall, the vehicle runs well, and appeared well kept and maintained. The subject vehicle had 2,851 miles stated on the odometer on February 14, 2017 when I inspected the vehicle.

PRE-LOSS VALUATION In the determination of market value, the year, make, model, trim level, body style, base equipment, optional equipment, aftermarket accessories, condition, mileage and color are all considered. Wholesale sales and market criteria may be used and derived based on 2,537 miles at time of loss and the vehicle’s normal garaged zip code, 97229. The market may then be expanded outwards until similar like, kind and quality comparables are found. In many

instances, wholesale comparables are used to determine trade or wholesale value, these are normally taken from overall comparable vehicles sold at auction in the month prior to this report. We use the largest sample possible per USPAP stipulations. The car sustained collision damage on August 03, 2016 with repair work totaling $18,259.90 . While researching this vehicle, I found no evidence that the vehicle has sustained any major damage, prior to August 03, 2016. In compliance with the Uniform Standards of Professional Appraisal Practice, the fair market value was determined by using market comparables of the subject vehicle and as a private owner selling the subject vehicle to an auto dealer. Multiple types of auto dealers were surveyed including new vehicle dealers, used car dealers, and even dealers with no actual brick and mortar storefront in order to produce a factual representation of what a dealer may pay for for the subject vehicle. Due to the condition and demand of this type of vehicle, in my professional opinion, the preloss fair market value of this 2016 Volvo XC90 T6 - R-Design 4D SUV AWD based on the 97229 related Private Sale to an Auto Dealer is $51,775.00 USD (excluding tax, title and destination charges).

PRE-LOSS Fair Market Value

$51,775.00

ESTIMATE OF RECORD REVIEW The review of the Estimate of Record provided by Precision Body & Paint Inc., indicates that all available corrective materials and processes were used in the attempt to restore this vehicle to pre-loss condition. Upon review of Precision Body & Paint Inc.’s Estimate of Recording, I came to these conclusions: •

• •

Structural / Frame Repairs: Based on the Estimate of Record I have determined this vehicle suffered structural damage that was either defined by the MOTOR CRASH ESTIMATING GUIDE(MCEG), I-Car, and/or by the NAAA Structural Damage Disclosure Policy (See Diagram Below). Based on Dealers surveyed, Frame labor has the same stigma as frame repair. o 12 hours of frame labor to repair the frame. Passive Restraints, Supplemental Restraint Systems and Seat Belts. There was no deployment of the Supplemental Restraint System (SRS) during the loss. Hardware and Trim: Removal and/or replacement of required hardware and trim was needed during the repair. It is noted that most of these pieces were inspected for damage when removed.

2017 NAAA STRUCTURAL DAMAGE DISCLOSURE REQUIREMENT

POST REPAIR VALUATION In order to determine the inherent diminished value, a Post Repaired valuation based on the 2016 Volvo XC90 T6 - R-Design 4D SUV AWD, Vehicle Identification Number YV4A22PM3G1077370, has been prepared. Again, in compliance with the Uniform Standards of Professional Appraisal Practice, the pre-loss value was determined by the largest fair market for privately owned vehicles that were of like, kind and quality to the subject vehicle, which is the Sale to an automotive dealer market. In the determination of the Post Repair Fair Market Value, the stigma of the damage history which occurred on August 03, 2016 has been used in accordance with the Uniform Standards of Professional Appraisal Practice, in the determination of the Post Repaired Value. Based on my research, I’ve found that the average automotive dealer will share concerns based on the deficiencies or repair defects a vehicle with a history of prior damage will have. These shortcomings may include, but are not limited to: • Substantial evidence to support that the safety system has been restored to pre-loss condition. This includes the inability to measure the factory specified levels of strength, rigidity, and tolerances necessary to ensure the supplemental restraints and crumple zones react as they were intended from the factory. • Evidence that repairs in areas that cannot be readily seen (such as behind a bumper cover) have been repaired properly with quality materials. • Factory decals and markings that cannot be restored due to availability. (i.e. VIN stickers, Factory theft deterrents, etc.) • Duplication of factory finishes, seals, seams, and/or welds. (Anchor marks, missing or cracked paint on bolt and/or nuts, robotic laser welds where the weld is seamed and is as strong as the metal surrounding it compared to use of Mig, Tig, Arc, spot welding and other types of welds and/or welding used by body shops when repairing welds or seaming materials together.) • Future deployment of the (SRS) Supplemental Restraint System, (ALR) Automatic Locking Retractors, (ELR) Electronic Locking Retractors or any other safety device that Kinetic Energy from the collision may affect in the future. (i.e. Air Bags not deploying in a future collision, ALR or ELR retractors not operating correctly)

•

Residual stresses. Welding, cutting, casting, grinding, and other repair processes involving heat and/or deformation. E.g. a repaired quarter panel may crumple faster that it was designed to after it has been repaired.

Factors that may impact a dealer’s purchasing decision: • • • • • • • • •

Structural/Frame Repair or Labor. Vehicle is no longer original. Prior Damage may affect the Manufacturer’s Warranty. Possible denial to Volvo’s Certified Pre-Owned Program. Unknown Quality of Repairs. Possible Unknown or Unfound damage from Kinetic Energy. May be against company policy to provide vehicles with prior frame or structural damage or repairs for retail sale at their facility. Vehicle reported to Carfax, WreckCheck, AutoCheck, or other accident reporting agencies. If sold through an NAAA auto auction a damage disclosure may be required.

Dealerships train appraisers to look for signs of prior damage and will normally perform automotive history checks, such as Carfax, Autocheck, Wreckcheck and more. The majority of dealers I surveyed were mostly concerned if a prior accident or collision had been reported to either Carfax or Autocheck, which are the history reports most used by consumers. 90 percent of the dealerships surveyed also stated that they would normally have a seller (customer) sign a document stating that the vehicle they are trading in has suffered no more than $500.00 in prior repairs, and if more for them to detail the type of damage and amount of repairs. If the dealer determines that the prior damage significantly affects the value, then the trade in value may be readjusted. The strongest factors weighing on the trade in value were structural damage/repairs, frame damage/repairs, air bag deployment and/or an accident being reported to Carfax or AutoCheck. New Car Dealer appraisers and Used Car Dealer appraisers surveyed stated loss of values on similar criteria up to 12% different. Where the majority of new car dealership appraisers stated they would not normally resale a vehicle with prior frame labor, repaired frame damage or repaired structural damage due to liability issues that could affect their Franchise, several used car dealer appraisers stated that they may take the risk, and in turn pay more for the trade in. The majority of New Car dealers surveyed stated that their normal formula for determining Actual Cash Value of a vehicle with prior frame or structural labor or repair was 50% of average wholesale value minus reconditioning, incidentals (such as auction fees, transportation, etc.) and even profit if they were not selling the vehicle on their lot. We did not use additional profit in the determination of loss of value as this can fluctuate significantly between dealers. Although it is reported that over 65% of vehicles are sold to dealers as trade-ins to New Car dealers, I chose to average the type of dealer’s value strategy in order to come to a conservative conclusion to the loss of value rather than a possible inflated value. Due to the disclosure of the damage and repairs, this 2016 Volvo XC90 T6 - R-Design 4D SUV AWD will carry the stigma of having structural/frame repairs and this knowledge will negatively affect the value perception of the buyer greatly.

Taking into account the condition, demand and factors that have affected the subject vehicle’s value due to the damage and repairs associated with the loss, in my professional opinion, the post fair market value of this 2016 Volvo XC90 T6 - R-Design 4D SUV AWD based on the 97229 zip code related used car market is $35,259.00 USD (excluding tax, title and destination charges). POST-REPAIRED REASONABLE FAIR MARKET VALUE

$35,259.00

INHERENT DIMINISHED VALUE SUMMARY Inherent Diminished Value is due to the stigma a vehicle assumes once it has been in a collision and repaired, even if the vehicle has been returned to 100% of Pre-Loss Condition. In the determination of the inherent diminished value an assumption of the vehicle being fully repaired 100% to pre-loss condition based on the date of loss only. The subject vehicle, a 2016 Volvo XC90 T6 - R-Design 4D SUV AWD, Vehicle Identification Number YV4A22PM3G1077370, with the Fair Market value based on an average sale to a dealer by a private owner, using information surveyed by auto dealers including new, used, large and small, Market samplings of like vehicles, book values, my 20+ years’ experience in the automotive sales industry, and input from multiple dealers as to the stigma effect of the damage and/or repairs the vehicle has suffered related to the loss on August 03, 2016. Determination of the inherent diminution of value is based on the assumption that the vehicle was returned to as close to pre-loss condition as possible by the auto body repair shop. Potential buyers will expect a vehicle with a history of prior damage to be discounted, when compared to a vehicle of like, kind and quality with no prior collision damage. Although a vehicle may have been repaired to 100% of pre-loss condition, the average potential buyer will perceive the vehicle as being “damaged goods”, and the perception of inferior repairs, undiscovered kinetic energy damage, and the stigma of assuming ownership of a vehicle with a damaged history will weigh heavily on their buying decision, even if there is documentation provided to show repairs were completed by a reputable repair shop. Normal Disclosures Over 90% of the Automotive Dealerships I have surveyed over the past 24 months, now require an automotive disclosure form be signed if a vehicle has sustained in excess of $500.00 in prior damage and/or collision repairs. In the event the damage affects the value of the vehicle, the vehicle may be reevaluated and the value adjusted accordingly. Most dealership disclosures ask that the total cost of repairs be disclosed and if the vehicle has sustained any previous damage or repairs to the structure or frame. Note: Any Damage or Damage Repairs in excess of $500.00 to a vehicle should always be disclosed at a private sale, failure to do so could possibly result in lawsuits related to negligence and possibly fraud. Most honest and prudent consumers, such as Carlos Cordeiro, will normally disclose prior damage and/or collision repairs due to legal and/or ethical reasons. PLEASE NOTE: There are many vehicle history reporting agencies including but not limited to, AutoCheck, VinAudit, Carfax, NMVTIS, and InstaVin. Many of these companies collect data from different sources and even though a collision may not show up on one, it may show up on another.

Any insurance claim made to a vehicle in the United States is required by law to be reported to the Insurance Services Office (ISO) Database, which is only available to insurance companies and law enforcement. This record will follow the vehicle for its usable life and may affect the loss payout or insurability of this vehicle in the future. Automotive dealers are aware that a vehicle associated with an insurance claim will be reported to the Insurance Services Office (ISO) which may affect a vehicle’s value in future claims. This 2016 Volvo XC90 T6 - R-Design 4D SUV AWD will carry a stigma of prior damage and this knowledge will normally have a negative effect on the value to retail consumers, automotive dealers, and future loss values associated with an insurance claim.

CONCLUSION This type and amount of damage, once disclosed, will deter a normal consumer or automotive dealer from considering this vehicle when compared to a like, kind, quality and equipped vehicle unless a substantial discount is allowed. It is my opinion this vehicle has suffered inherent diminution in value related to the collision on August 03, 2016. It is my final conclusion that a normal automotive dealership appraiser who is under no duress to purchase this vehicle and aware of pertinent facts of the prior damage, will apply an additional negative adjustment of $16,516.00 USD to consider this vehicle when compared to a like equipped 2016 Volvo XC90 T6 - R-Design 4D SUV AWD, free of a damage history on trade-in.

LOSS OF FAIR MARKET VALUE

$16,516.00

METHODOLOGY OF WORK Methodology: Based on experience and research, I have come to a conclusion that the majority of privately owned vehicles that are less than 10 years old and have less than 100,000 miles are normally sold to automotive dealers as trade ins, and not sold to the general public. According to the Uniform Standards of Professional Appraisal Practice (USPAP) stipulations, an appraiser must follow certain guidelines when producing an appraisal. These guidelines include: • Determine how the appraisal will be used. In this case, the appraisal will be used to demonstrate the loss of value the subject vehicle has suffered due to the collision that occurred on August 03, 2016, after the vehicle has been repaired and brought back to pre-loss condition. • Determination of who will use the appraisal and how. In this case, the owner of the subject vehicle will use the appraisal demonstrate an inherent loss of value to the subject vehicle due to a stigma that will be attached to the vehicle, even if the vehicle may have been brought back to 100% of it’s pre-loss condition. In detemination of this loss of value, an assumption was used that the vehicle would be in the same condition as it was prior to the loss. • The largest market should be used to determine the valuation. In this case, sale as to a dealer is the largest fair market for the subject vehicle in determining loss of

value since the majority of owners of vehicles of like, kind and quality will sell their vehicle to a dealer as a trade-in, rather than to sell to the general public. This is not true of all vehicles, but it is true of comparable vehicles to the subject vehicle. Vehicle condition of the subject vehicle in pre-loss condition is determined and graded using Black book condition values of Extra Clean, Clean, Average, Rough and below Rough (see conditions below) as bench marks. Based on my 20+ years’ experience in the automotive business and by surveying dealership managers who evaluate trade-ins I’ve determined a conservative methodology an average dealer would use to when purchasing this type of dealer from a private owner. Pre-loss fair market value is first determined by accessing and reviewing actual sold wholesale market comparables and developing a trend line so as to determine the average wholesale value of sold comparable vehicles. This amount is then compared to the current average Black Book Carpoint® wholesale value. The two values are average and a condition adjustment is made if the subject vehicle is above or below average condition. Using auto guide book values compared and adjusted to the market comparables, I determine the probable pre-loss actual cash value to a dealer using a proprietary algorithm I have developed that takes into consideration surveyed automotive dealer appraiser’s responses. Once the probable pre-loss reasonable Fair Market value is determined, I use an algorithm to adjust the value based on the factors below which all automotive dealers I surveyed reported to have a significant impact on the actual cash value (ACV) of a vehicle. These are loss factors I have determined through research that a majority of dealers surveyed take into consideration when determining trade in value. I’ve determined this criterion based on my 20 plus years of automotive sales experience, and information gained from dealership auto appraisers over the past 24 months. Listed below are the significant criteria which surveyed dealers suggest will affect trade-in value. DEALER IMPACT CRITERIA a. b. c. d. e. f.

Less than $500 in Repaired Cosmetic Damage (and/or no collision) Repaired Cosmetic Damage more than $500 but less than $1,500 cost of repairs. Repaired Cosmetic Damage more than $1,500 cost and less than $2,500 Cosmetic Damage in excess of $2,500 Accident Reported To Carfax/ Autocheck or other Reporting agency Structural / Frame labor, repairs and/or damage including Unrepaired / Repaired Frame Machine Clamp Marks. g. Damage to any inner trunk panels. h. Air Bag Deployment i. Structure Damage + Air Bag Deployment

Additional adjustments to the Base Modifier are made by a Buyer Demand Modifier • • • •

High Line Luxury Vehicle (Limited Buyers) Performance Vehicle Low Profit, High Incidentals (<$5,000 Pre-loss Trade In Value) Convertible

• • • • •

Hybrid or Electric Vehicle Pickup or Utility Vehicle High Demand > 75% VDI (Vehicle Demand Index) Low Demand < 25% VDI (Vehicle Demand Index) Accident Reported to Carfax/ Autocheck or other Reporting agency

The algorithm is complex and proprietary in nature and not fully detailed in this report. Once I have determined the probable loss of value based on probable trade in value, I then review the information supplied by the algorithm, differences in highs and lows of automotive guide book values, fair market comparables and other information I have received from both new car and used car dealer appraisers to come to an approximate loss of value of the subject vehicle suffered related to trade in loss of value. Once this information has been reviewed, I take into consideration additional market data such as color, fleet sales, anomalies in the market (such as fuel prices, recalls, media exposure, etc.) etc. I then use my 20 plus years of experience in automotive sales, to come to a conclusive opinion as to the final loss of value, also known as diminished value, the subject vehicle has suffered. In order to determine if any types of diminished value exist, certain expertise and training is required. Ken Nix possesses all of the training, expertise and research capability which is required to provide a competent and reliable dollar amount reflecting diminished value. Additionally, when analyzing and calculating inherent diminished value, in order to produce the most credible report possible, hypothetical sales models are sometimes used due to a lack of sufficient market or sales data. All opinions, conclusions, calculations, and analysis are based on over 20 years of automotive appraisal experience combined with following standards set forth by the Uniform Standards of Professional Appraisal source (USPAP). When complete, this report can be used to demonstrate the total diminution in market value of the subject property. My conclusion of value is based on the fact that the titled owner of the property had full and complete control over the use and sale of the vehicle and such value has been assessed as free and clear of encumbrances at the time of loss. In all instances sales and market data have been evaluated from the perspective of the actual loss date and the market area related to the subject vehicle’s owner’s physical address at the time of loss. The report date indicated at the beginning of this report is the date on which this report was generated. Kenny Nix, also known as Ken Nix in this report, is an internationally known automotive expert with over 20 years’ experience in retail automotive sales and motor vehicle valuations. Ken is the founder and administrator of three automotive clubs with over 95,000 members. He has received formal training from Volkswagen, Volvo, Honda, Ford, Toyota, Dodge, Chrysler, Chevrolet, Mazda, Oldsmobile, Pontiac, Mercury, Lincoln, Kia and Infiniti for product knowledge and marketing of these franchise vehicles. Ken was previously employed by Diversiform and Reynolds and Reynolds, during which he was responsible for providing Consumer Sales and Customer service consultations to hundreds of automotive dealership personnel, including Dealer Principals, Fixed Ops Directors, Collision Repair Managers, Service Managers, Sales Managers and General Managers across the United States. Ken has been a licensed Oregon appraiser since April 19, 2010 and is in good standing with the Oregon Department of Transportation. Ken is a judicial expert, who by virtue of training,

education, and experience hold’s sufficient knowledge of vehicle sales and valuation to valuate vehicles within his scope throughout the United States of America. ODOT Certificate # V34-075 CONDITION GRADES Vehicle Conditions •

•

Extra Clean (X-CL) - Appears like new for the model year with very low miles and no visible signs of physical wear. There should be a solid vehicle history report with no reported issues or questionable notations. All parts are original and in place. The interior should smell fresh and there should be no tears or stains. It should be mechanically correct with all fluids clean and changed according to the prescribed maintenance schedule. Tires should be like new and completely matching, including the spare. Clean - Very little interior or exterior wear. The vehicle is 100% mechanically sound. Any paint repair is almost unnoticeable. The vehicle should be accompanied by a clean history report. All tires should fully match and have good to excellent tread. There should be fewer than average miles for the model year. Average - The vehicle is solid with substantial serviceable life remaining, but normal interior and exterior wear is allowable. Any previous paint repair must only be apparent to the trained eye. There could be minor mechanical or maintenance work required. Tires should be in average condition or better and there should be typical miles for the model year. Rough - The interior and exterior will show more than normal and expected wear and tear. The vehicle could have excessive miles for the model year and may be approaching the end of its serviceable life. The vehicle could have had previous body damage with possible sub-par repairs. There could be cracked glass. The interior could be torn, stained and have adverse odors. There could be physical or mechanical repairs needed. Tires could be worn and/or mismatched. Negative history, frame damage or mileage discrepancy (True Miles Unknown or TMU) would push condition to below Rough condition. Poor – Anything Below Rough Condition.

PHYSICAL INSPECTION IMAGES

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

S# Operation

Refinish

Vehicle: Style: License: VIN: Mileage: Mileage Out:

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Description

Type

Side Rail Assembly

Insurance Information

Price Adj Price T

Ins Co: Contact: Phone: Claim #: Deduct:

Lbr

TOWING

Addl Dept Paint R

$255.00

$507.33

Remove/Replace

Side Rail Assembly

Refinish

Side Rail Assembly RT

Remove/Replace

Side Rail Assembly RT

$507.33

Remove/Replace

Muffler Assembly

$596.72

0.2

Remove/Replace

Crsmbr,Floor

$51.77

2.4

Refinish

Crsmbr,Floor

Remove/Replace

Brkt,Floor

Refinish

Brkt,Floor

Remove/Replace

Brkt,Floor

Refinish

Brkt,Floor

Remove/Replace

Brkt,Floor

Refinish

Brkt,Floor

Remove/Replace

Brkt,Floor

Refinish

Brkt,Floor

Remove/Replace

Brkt,Floor

Refinish

Brkt,Floor

Remove/Replace

Reinf,Floor

Refinish

Reinf,Floor

Remove/Replace

Pipe,Exhaust

1 Remove/Replace

Pipe,Exhaust

1 Remove/Replace

Pipe,Exhaust

Remove/Replace

Pipe,Exhaust

Remove/Replace

Hanger,Muffler

1 Remove/Replace

Shield,Heat

Remove/Replace

Brkt,Muffler

Remove/Replace

Brkt,Muffler

4/4/2017 3:07:58 PM

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

B R

$10.92

0.2

$10.92

0.2

$10.92

0.1

$10.92

0.1

$13.65

0.9

$26.17

$381.45

$88.33

$105.71

$178.61

$11.95

$231.03

Extn,Rear Side Rail

0.1

B R

0.1

B R

0.1

B R

0.1

B R

0.1

B R

0.3

B R

1.0

R NW

Addl

1.0

0.2

M M

0.1

M M

0.1

0.2

$34.10

0.1

$34.10

0.1

4.1

$231.03

Page # 1

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

Refinish

Vehicle: Style: License: VIN: Mileage: Mileage Out:

Insurance Information

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Extn,Rear Side Rail

Ins Co: Contact: Phone: Claim #: Deduct:

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

R 4.1

0.4

Refinish

Extn,Rear Side Rail

0.4

Refinish

Extn,Floor Pan Rear

0.3

Refinish

Extn,Floor Pan Rear RT

0.3

Remove/Install

Pnl,RR Floor Trim

Remove/Install

Pnl,RR Floor Trim

Remove/Install

Tray,Battery

Remove/Replace

Seal,Catalytic Conv

$10.69

Remove/Replace

Seal,Catalytic Conv

$10.71

Remove/Install

Battery R & I

Remove/Install

Shield,Engine Lower

Remove/Install

Shield,Engine Lower

1 Remove/Replace

Clamp,Exhaust

$15.69

Remove/Replace

Clamp,Exhaust

$65.21

Remove/Install

Front Wheel R & I

0.1

Remove/Install

Front Wheel R & I

0.1

Remove/Install

Rear Wheel R & I

Remove/Install

Rear Wheel R & I

Remove/Install

Spare Wheel R & I

Blend

Pillar,Windshield

0.3

Blend

Pillar,Windshield

0.3

Remove/Install

Seat Assembly,Rear LT

0.2

Remove/Install

Seat Assembly,Rear RT

0.2

Remove/Install

Mldg,Rocker Panel

0.5

Remove/Install

Mldg,Rocker Panel RT

0.5

Remove/Install

W/Strip,Front Door

0.2

Remove/Install

W/Strip,Front Door

0.2

Blend

Door Shell,Rear

Remove/Install

W/Strip,Rear Door

4/4/2017 3:07:58 PM

B 0.2

M M B

0.6

M M

$15.69

0.2

LT LT

R 0.2

2.1

Page # 2

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

Vehicle: Style: License: VIN: Mileage: Mileage Out:

Remove/Install

W/Strip,Rear Door

Repair

Spot weld burns

Insurance Information

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Ins Co: Contact: Phone: Claim #: Deduct:

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

0.2

1.0

Spot weld burns

1.0

Remove/Install

Mldg,Rear Door Belt

0.1

Remove/Install

Cladding,Rear Door

0.3

Remove/Install

Pnl,Inner Door Trim

0.5

Remove/Install

Handle,RR Door Outer LT

0.1

Repair

Panel,Quarter

10.0

Refinish

Panel,Quarter

Repair

Panel,Quarter

Refinish

Panel,Quarter

2.8

Blend

Door,Fuel Filler

0.2

Remove/Install

Mldg,Qtr Whl Opening LT

Remove/Install

Mldg,Qtr Whl Opening RT

Remove/Install

Qtr Glass R & I

Remove/Replace

Sealant Kit,Qtr Glass RT

Remove/Install

Shield,Quarter Panel LT

0.3

Remove/Install

Shield,Quarter Panel RT

0.3

Remove/Install

Pnl,Inner Qtr Trim

Remove/Install

Pnl,Inner Qtr Trim

Remove/Install

Pnl,Qtr Trim Lower

Remove/Install

Pnl,Qtr Trim Lower

Repair

Shell,Tailgate

Refinish

Shell,Tailgate

Remove/Replace

N/Plate,Tailgate

$43.91

1 Remove/Replace

N/Plate,Tailgate

$58.65

Remove/Replace

N/Plate,Tailgate

Remove/Replace

Sensor,Tailgate

Remove/Replace

Pnl,Rear Body Outer

Refinish

Pnl,Rear Body Outer

4/4/2017 3:07:58 PM

R 3.0

1.7 04

$23.63

2.5

G G

4.0

B R

0.2

$35.76

0.2

$161.55

0.2

$410.32

2.0

$58.65

2.6

1.4

Page # 3

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

Vehicle: Style: License: VIN: Mileage: Mileage Out:

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Ins Co: Contact: Phone: Claim #: Deduct:

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

Remove/Replace

Pnl,Rear Body Inner

Refinish

Pnl,Rear Body Inner

Remove/Replace

Pan,Rear Floor

Refinish

Pan,Rear Floor

Remove/Install

Fuel Tank R & I

1.2

Remove/Install

Cover,Luggage

0.1

Remove/Replace

Reinf,Rear Body Panel LT

0.2

Refinish

Reinf,Rear Body Panel LT

Remove/Replace

Reinf,Rear Body Panel RT

100

Refinish

Reinf,Rear Body Panel RT

101

Remove/Replace

Reinf,Rear Body Panel LT

102

Refinish

Reinf,Rear Body Panel LT

103

Remove/Replace

Reinf,Rear Body Panel RT

104

Refinish

Reinf,Rear Body Panel RT

105

Remove/Replace

Reinf,Rear Body Panel LT

106

Refinish

Reinf,Rear Body Panel LT

107

Remove/Replace

Reinf,Rear Body Panel RT

108

Refinish

Reinf,Rear Body Panel RT

0.2

109

Refinish

Reinf,Tllmp Opening LT

0.2

110

Refinish

Reinf,Tllmp Opening RT

0.2

111

Remove/Install

Panel,Rear Body Trim

112

Remove/Replace

Gasket,Taillamp

$13.87

113

Remove/Replace

Gasket,Taillamp

$13.87

114

Remove/Install

Taillamp Assembly

4/4/2017 3:07:58 PM

Insurance Information

$91.56

R NW

$1,404.13

17.9

B R

$37.17

R NW

$37.17

0.2

$20.52

$26.17

1.4

$26.17

0.1

1.4

0.1

B R

0.2

B R

0.2

B R

1.0

B R

1.2

0.2

Page # 4

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

Vehicle: Style: License: VIN: Mileage: Mileage Out:

Insurance Information

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Ins Co: Contact: Phone: Claim #: Deduct:

Taillamp Assembly RT

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

115

Remove/Install

116

1 Remove/Replace

117

Remove/Install

Brkt,Rear Bumper Mtg LT

118

Remove/Install

Brkt,Rear Bumper Mtg RT

119

1 Remove/Replace

Cover,Rear Bumper Upr

Brkt, Obstacle Snsr

120

Refinish

Brkt, Obstacle Snsr

121

Remove/Replace

Brkt, Obstacle Snsr

122

Refinish

Brkt, Obstacle Snsr

123

Remove/Replace

Brkt, Obstacle Snsr

124

Refinish

Brkt, Obstacle Snsr

125

1 Remove/Replace

$1,021.02 $1,021.02

$26.92

0.8

0.1

B R

$15.10

0.1

B R

$15.10

0.1

$26.92

0.1

Refinish

Brkt, Obstacle Snsr

127

Remove/Replace

Brkt, Obstacle Snsr

$15.10

128

Remove/Replace

Brkt, Obstacle Snsr

$15.10

129

Remove/Replace

Guard rear bumper lower

$108.11

0.2

130

Refinish

Guard,RR Bumper Lower

131

Remove/Replace

Pad,Rear Bumper Step

$101.12

0.2

132

1 Remove/Replace

Mldg,Rear Bumper Cover LT

$32.15

0.1

133

1 Remove/Replace

Mldg,Rear Bumper Cover RT

$20.94

0.1

134

Remove/Replace

Reflector,Rear Bumper RT

$28.10

0.1

135

Remove/Replace

Filler,Rear Bumper

$122.27

0.4

136

Remove/Replace

Filler,Rear Bumper

$122.27

0.1

137

Remove/Replace

Brkt,Rear Filler Mtg LT

$119.96

0.1

138

Remove/Replace

Brkt,Rear Filler Mtg RT

$22.21

0.1

139

1 Remove/Replace

Spoiler,Lower Rear

$109.69

140

Blend

Cover,Tow Hook Access

141

Remove/Install

Crsmbr,Rear Susp

142

4/4/2017 3:07:58 PM

Flex Additive

0.8

B R 6.8

$37.25

0.1

B R

0.1

126

$109.69

0.1

B R

0.3

0.1

M R

Page # 5

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

143

Vehicle: Style: License: VIN: Mileage: Mileage Out:

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Insurance Information Ins Co: Contact: Phone: Claim #: Deduct:

Corrosion Protection

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

0.3

144

Repair

Frame Sag,Rear

2.0

145

Repair

Frame Mash,Rear

2.0

146

Disable Air Bag

0.3

147

Color Sand And Buff

$15.00

148

Cover Car Interior

$5.00

149

Clean Up Old Adhesive

150

Weld Thru Primer

$8.00

151

Euro cavity wax

$35.00

1.0

152

4 whl alignment

$10.95

0.6

153

Clear fault codes

$2.40

1.2

154

Mask for primer

$5.00

0.3

155

Mask trunk opening

$5.00

0.3

156

Mask door opening

$5.00

0.3

157

Mask for overspray

$5.00

157

Block and fill

2.0

158

Blend rt rf side panel

0.8

159

Blend lt rf side panel

0.8

160

Raise rope w/shield

0.5

161

Hazard wste disposa;

162

TINT INNER STRUCTURE C

163

Remove/Replace

164 165

TRAILER HITCH ASSY

0.5

$5.00

$417.57

0.1

REAR BMPR PROTECTOR PLATE Repair

R NW

0.5

B B

BLEED BRAKES

0.5

166

REAR BUMPER VINN LABEL A/M

$29.95

0.1

167

PRESCAN CHECK ENGINE LITE

$9.45

0.7

168

Remove/Install

RT QTR PRESSURE VENT

0.2

169

Remove/Install

LT QTR PRESSURE VENT

0.2

4/4/2017 3:07:58 PM

1.5

Page # 6

Precision Body & Paint Inc.

Invoice

PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information

Vehicle Information

Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

170

Remove/Install

171

Vehicle: Style: License: VIN: Mileage: Mileage Out:

Insurance Information

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Ins Co: Contact: Phone: Claim #: Deduct:

SHEILD UNDER BODY CENTERS HEAVY SPRAY SND DEADNER

$40.00

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

1.0

172

Repair

PRECISION MASK ROOF

173

Repair

ECOAT NEW PANELS

0.5

174

SETUP CELLETTE BENCH

5.5

175

CELLETTE TAKEDOWN

2.5

176

176 177

FIXTURE RENTAL

$877.50

Paint Materials

$803.20

FIXTURE FREIGHT CHARGES

$482.65

$877.50

B R

$482.65

178

LR door adjust

0.5

179

RR door adjust

0.5

180

Trim upper /lowe spoiler

2.0

181

Install acc. pins x30

4.0

182

1 Remove/Replace

Reinforcement

$30.00

$26.70

184

185

Totals:

0.8

Hours:

Rate:

Total:

Final (Combined) Totals Parts - New Parts - Aftermarket PARTS TOTAL Body Labor Refinish Labor Mechanical Labor Frame Labor Glass Labor LABOR TOTAL

4/4/2017 3:07:58 PM

$7,681.92 $29.95 $7,711.87 74.0 30.8 11.8 12.0 1.7

$54.00 $54.00 $115.00 $65.00 $54.00

$3,996.00 $1,663.20 $1,357.00 $780.00 $91.80 $7,888.00

Page # 7

Precision Body & Paint Inc. PO Box 369, Beaverton, OR 97075 14145 SW Canyon Rd, Beaverton, OR 97005 503 641-5634

Invoice RO #:46335 Unit #: Arrived: 8/6/2016 Ready: 2/3/2017

Estimator: Joseph Stuckenschneider

Customer Information Name: CORDEIRO, CARLOS Address: 4038 NW MCGRATH CT PORTLAND OR 97229 Phone: 503-531-8390

Shop Supplies Sublet Paint Materials Hazardous Waste Removal Towing Alpine Glass ------------------------Sub Total (0.000%) GRAND TOTAL

4/4/2017 3:07:58 PM

Vehicle Information Vehicle: Style: License: VIN: Mileage: Mileage Out:

2016 BLUE VOLVO XC90 T6R 4D UT 607JHR YV4A22PM3G1077370 2537

Insurance Information Ins Co: Contact: Phone: Claim #: Deduct:

Liberty Mutual Insurance Lib mut adj. Patrick, 469-242-7415 800-577-4299 034157241 $0.00

$135.80 $1,360.15 $880.45 $5.00 $255.00 $23.63 $18,259.90 $18,259.90

Page # 8

Contact Information

5/18/2017

Company: Individual Users Contact: Ken Nix Email: lossvalues@gmail.com

Telephone: 503 649 9993 Fax:

Notes

Vehicle Info For 2016 Volvo XC90 T6 - R-Design 4D SUV AWD $53,800 MSRP: Fin Adv: Equip Ret: Tire Size: Base HP: Taxable HP: Model Number: Price Includes:

VIN: $50,875 UVC: $57,684 MPG: 275/45R20 Weight: 316 @ 5700 Fuel Type: 16.7 Wheelbase: XC90T6 End of Term Months: AT AC LTH SR

YV4A22PM3G10 77370 Adj. State: 2016960255 Mileage: 20/25 Mileage Cat: 6084 Cylinders: Gas Transmission: 117.5 Drive Train: 0 End of term mileage:

Oregon 2537 G 4 A AWD 0

Wholesale Black Book Values as of 5/1/2017 Base Options Region Mileage Total

X-CL $49,275 $700 $0 $1,525 $51,500

Clean $47,475 $700 $0 $1,850 $50,025

Average $44,975 $700 $0 $2,175 $47,850

Rough $42,375 $700 $0 $1,875 $44,950

Clean $48,015 $700 $0 $1,850 $50,565

Average $45,725 $700 $0 $2,175 $48,600

Rough $39,830 $700 $0 $1,875 $42,405

Clean $53,450 $700 $0 $1,850 $56,000

Average $49,875 $700 $0 $2,175 $52,750

Rough $46,950 $700 $0 $1,875 $49,525

Trade In Black Book Values as of 5/1/2017 X-CL N/A N/A N/A N/A N/A

Base Options Region Mileage Total

Retail Black Book Values as of 5/1/2017 Base Options Region Mileage Total

X-CL $55,525 $700 $0 $1,525 $57,750

Residual Black Book Values as of 5/1/2017 Base Options Mileage Total

12 Month $35,650 $650 $2,025 $38,325

24 Month $29,700 $600 $1,875 $32,175

30 Month $26,925 $575 $1,500 $29,000

36 Month $24,600 $550 $1,725 $26,875

42 Month $22,225 $525 $1,650 $24,400

48 Month $20,250 $500 $1,550 $22,300

60 MonthEnd of Term $16,525 $0 $450 N/A $1,400 N/A $18,375 $0

Black Book Add/Deducts 22-Inch Wheels +700

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017

April 17th I.

General Policies 1. Fair and Ethical Sale a. The sales made at an Auction are intended to promote fair and ethical treatment to both the Buyer and Seller. If Auction determines that the transaction is not fair and ethical to either party, the Seller and the Buyer agree that Auction may cancel the sale, at its sole discretion. Federal, State, and Local laws supersede these policies where applicable. 2. Auction Role in Sale: a. Auction makes no representations or guarantees on any vehicle sold or offered for sale. b. Auction is not a party to the contract of the sale. The sales contract is between the Seller and Buyer only. c. All vehicles bought or sold on the premises must be processed through the Auction office. Failure to do so will result in suspension of trading privileges at Auction. d. Auction reserves the right to review any audio/video documentation to verify the accuracy of a sale. e. Any vehicle consigned with the Auction is subject to government inspection, with or without prior notice, by the FBI, State Police, National Auto Theft Bureau, Local Police Authorities, any other governmental agency, or quasi-governmental agency. 3. Auction VIN Policies a. All vehicles consigned must have a visible public Vehicle Identification Number (VIN) plate attached to the vehicle by the manufacturer or state inspector (state reassigned VIN only). Those vehicles having a reassigned VIN plate by the State in place of the original VIN plate must be announced or will be subject to sale cancellation or Buyer return. Auction reserves the right to refuse the sale of any vehicle in which the VIN plate appears to be altered in any way.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 II.

Sale Light System Auction has a standard light/video display system to describe the condition and/or disclosures related to the vehicle being sold. The system is defined as: 1. Green Light –Ride and Drive: The green light signals that this vehicle is guaranteed under the conditions outlined in this policy by the seller. Any defects or issues requiring disclosure per this policy should be announced using the green and yellow lights. 2. Yellow Light – Limited Guarantee: This light is an indication to the Buyer that the Auctioneer or Selling Representative has made announcements that qualify/clarify the condition or equipment and limit arbitration of this vehicle in conjunction with the green light or when “limited guarantee” is announced. 3. Red Light – As-Is: Vehicles selling under the red light will only qualify for arbitration under the rules outlined in this policy. (As-Is dollar amount, model years, and mileage are subject to local auction policy). 4. Red and Yellow Light – As-Is, No Arbitration: Vehicles selling under the red and yellow light will only qualify for arbitration under the rules outlined in this policy. (As-Is dollar amount, model years, and mileage is subject to local auction policy). 5. Blue Light – Title Attached/Title Unavailable/Title Absent: This light is used to announce that the title is not present (auction managed location) at the time of the sale. For Auction rules regarding titles please refer to the Title Arbitration Policy section. If “title attached/unavailable/absent” is not announced, a vehicle could be arbitrated for no title in the absence of local auction company policy.

Announcement /Light Legend Announcements: Ride and Drive Only Ride and Drive with Caution Limited Guarantee Only AS-IS, No Arbitration

Light Usage Recommendation Green Yellow Red n/a n/a ü n/a ü ü n/a n/a ü n/a n/a ü

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 III.

Seller Responsibilities: 1. Seller will be held responsible for the accuracy and completeness of all representations or descriptions. This includes handouts, catalogues, vehicle markings, condition information or vehicle listings and verbal or written statements made by Seller, Auction, Auctioneer or Selling Representative at the time of sale. This includes the condition report written by or on behalf of the seller as per the “NAAA Generic Condition Report Position Statement”. The Seller understands that the sale light/video display is a binding arbitration representation of vehicle condition, and is therefore responsible for ensuring that their vehicles sell under the correct light in the lane. 2. Mileage announcements are not required for vehicles that are 10 years or older and/or deemed exempt from Federal/State Odometer and Title disclosure laws unless a mileage discrepancy is known or apparent to the seller. The Seller may represent miles on exempt vehicles; any disclosures made by the Seller and all known odometer discrepancies are grounds for arbitration. 3. Title discrepancies must be announced including, but not limited to: not actual miles, salvage, theft recovery, stolen vehicle, flood damage, Lemon Law buybacks and trade assist. 4. If a vehicle is being offered for sale by a third party, an announcement of “3rd Party Seller” is required. Disclosure requirements and time limits are subject to local auction policy. 5. Announcements are required for any matters that relate to the safety or integrity of the vehicle including as per the stated dollar threshold and disclosure requirements stated in this policy, all requirements under local, state or federal statutes or regulations. Announcements must be made both verbally and disclosed on the auction invoice/sale contract/bill of sale or equivalent document in a physical or online auction environment. 6. The announcement of the presence of warning lights does not exempt a Seller from arbitration responsibilities as defined by the policy. The issue/defect found to be the cause of the light may be arbitrated within the stated time period and dollar amount threshold according to Appendix 1. 7. The availability of a manufacturer’s warranty shall not affect a Buyer’s right to arbitrate a vehicle. Regardless of the warranty coverage in terms of the root cause of the complaint, an announcement may be required. 8. In the event of a successful arbitration by the Buyer, the Seller is responsible for reimbursement of all reasonable documented expenses incurred by the Buyer (excluding profit, commissions and detail charges) on vehicles arbitrated for undisclosed conditions. Reimbursements that qualify under these guidelines will be at the sole discretion of the Auction and will be limited to the reasonable and documented expenses at auction (wholesale) repair cost. 9. Seller will not be paid for vehicles in arbitration until arbitration is settled and vehicles are sold. For arbitrations occurring after the seller has been paid, seller is required to promptly return the payment to the auction if the transaction is voided as a result of arbitration.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 IV.

Buyer Responsibilities: 1. Prior to placing bids, the Buyer is responsible for inspecting the vehicle, listening to and reviewing any verbal or written announcements and disclosures made by the Seller, Auction, Auctioneer or Selling representative. Online Buyers are also responsible for reviewing all pertinent information available online, including, but not limited to, announcements, disclosures, condition reports, pictures and online listings. Buyers are also responsible for observing and understanding the sale lights (Green, Green/Yellow, Yellow, Red, Red/Yellow and/or Blue), which identify various sale conditions for the vehicle. Once the vehicle is sold, the Buyer must review the Auction sales receipt or appropriate document to confirm the vehicle price, disclosures and announcements are correct before legibly printing and signing their name or digitally/electronically signing the Auction sales receipt or appropriate document. 2. It is strongly encouraged that an Online Buyer should have a Post Sale Inspection (PSI), warranty or assurance product from the auction on vehicles purchased. 3. The auction will not arbitrate vehicles based on any unintentional errors or omissions of any promotional information related to the vehicle, walk-around, handouts, catalogues, vehicle markings, or vehicle listings as they are for the convenience of the buyer and are not to be relied upon as accurate or complete. 4. Buyer agrees to be liable for any and all work done to a vehicle (including a vehicle purchased as title attached, unavailable or absent) prior to returning the vehicle to Auction except on vehicles arbitrated for undisclosed conditions not detectable through vehicle inspection, including but not limited to, not actual miles, salvage, theft recovery, stolen vehicle, flood damage, Lemon Law buybacks and trade assist. 5. The Buyer is financially responsible for any pending sale and assumes all risk of loss until arbitration is final. 6. The Buyer or Buyerâ&#x20AC;&#x2122;s agent (transporter or driver) should note must document any obvious damage on the gate release prior to removing the vehicle from the Auction or facilitation service providerâ&#x20AC;&#x2122;s location. Auction or facilitation service provider and Seller will not be responsible for any obvious damage not identified on the gate release or the condition report once the vehicle is removed from the location. 7. The Buyer shall not surrender possession of the vehicle to any claimant, except as required by legal process, nor shall Buyer voluntarily pay or acknowledge the validity of any claim, without the prior approval of Auction. Time is of the essence. Any failure on the part of the Buyer, after becoming aware of said claim, to notify Auction of any claim in a timely manner or failure of the Buyer to cooperate in defending any such claim shall relieve Auction and seller of any liability under this policy. 8. A vehicle is not considered returned until received, inspected and approved for return by Auction management. Any vehicle returned must be in the same or better condition as when sold. Any vehicles delivered to and left on Auction premises without Auction approval remain the sole responsibility of the Buyer. Buyer assumes all risk of loss. Vehicle must be returned in a timely manner consistent with Auction direction.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 9. There may be a charge of $(auction choice) per mile for excessive mileage on a returned vehicle at the discretion of the Auction. Vehicles with over (auction choice) miles from when sold are not eligible for arbitration. 10. The Seller/Auction shall not be liable for any vehicle sale or repairs made by the Buyer before the title is received by the Buyer. If the title has been mailed from Auction to Buyer, Buyer may not return vehicle. If the Seller presents a valid negotiable title to the Auction within close of business on the next day (excluding weekends and auction observed holidays) from the time that the Buyer notifies the auction of their intent to return the vehicle, then the transaction will stand.

Title Arbitration Policy: 1. All titles submitted by Seller must be in Seller’s company name on title or on a properly executed reassignment form. The Seller guarantees the titles of vehicles that are sold through Auction. This guarantee of the title warrants that the title shall be marketable and free and clear of all liens and encumbrances. This includes any brand (such as “salvage”) noted upon the current or any prior certificate of title unless such encumbrances were announced at the time the vehicle is sold through Auction and for a period of four (4) years from the date of sale. Seller’s liability under this title guarantee shall never exceed the Auction sale price (the “maximum amount”) of the vehicle, and this maximum amount shall be reduced by two percent (2%) per month following Auction sale date. All liability under this title guarantee shall expire and terminate 48 months four (4) years after Auction sale date. Auction will not be responsible for any expenses incurred on vehicles returned for late title. 2. Seller warrants, represents and guarantees possession and conveyance of a certificate of title, properly executed, valid in the state where the transaction is occurring and clear of all liens and encumbrances (except current year DMV fees in California), and seller warrants and will defend the title against the claims and demands of all persons whatsoever. 3. Seller will ensure that the title must be reassigned directly to Buyer. Any title assigned directly to facilitating auction will not be accepted. 4. Seller will not be paid for vehicles until a transferable title is received. 5. Auction accepts no responsibility for non-titled vehicles sold without title. Seller must announce the vehicle being sold with a bill of sale only and that there is no title to transfer. All non-titled vehicles and equipment will be sold “As-Is.” 6. If the title problem is due to a clerical or coding error, or incomplete documentation, Auction shall be given reasonable time after receiving notice to have the error corrected. 7. Applications or other documents related to a duplicate title will not be accepted, unless announced as such or if allowed by the appropriate jurisdiction. 8. Where legal by municipal and/or state law, any vehicle being offered for sale with a foreign (nonUS) title must be disclosed prior to the sale by the seller. Disclosure requirements and time limits are subject to local auction title policy. Vehicle must be legal to sell in the United States. 9. Seller has up to a maximum of [see individual Auction Company’s Title Policy (Auction Choice)] calendar days for title to be received by Auction. (Sale day is Day 1). After (Auction Choice) calendar day period, it is the Buyer’s option to return the vehicle or wait a reasonable period of time for the title. If, after 90 calendar days, Seller has not produced negotiable title and Buyer has not

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017

10.

11.

12.

13.

VI.

returned the vehicle, this title guarantee shall not apply and Auction shall have no duty to produce the certificate of title to the Buyer and shall have no duty to pay Seller. Vehicles lacking a properly assigned title or reassignment to transfer a title at time of sale must sell “Title Attached/Title Unavailable/Title Absent,” unless announcement is not required within the region with the Blue light on. Vehicles lacking lien release or a valid repo affidavit for a repossessed vehicle (where allowed by law) must be sold “Title Attached/Title Unavailable/Title Absent,” unless announcement is not required within the region. With the Blue light on. In regard to defect in title, and in any matter relating to odometer mileage, odometer statements, or damage disclosure statements: Seller and Buyer agree to indemnify and hold harmless Auction from any liability, loss costs, damage or expense, including attorney fees which may arise either directly or indirectly from the sale and purchase of the consigned vehicle including but not limited to title services provided. Whenever any claim is made by any person against the title of a vehicle, whether by suit or otherwise, the Buyer, after becoming aware of said claim, shall immediately notify Auction. This involves giving full particulars of claim, cooperating fully in defending any legal action, and in taking other steps to minimize possible loss.

Grey Market Vehicles: “Previous Canadian and/or Grey Market Vehicles:” 1. A “Previous Canadian” disclosure is required for any vehicle (regardless of manufacturing origin) having been registered in a Canadian province. Additional announcements may be required as well due to the use in Canada (ie Full or partial voided warranty, foreign title and etc.) 2. Eligible Vehicles Any vehicle not originally built to U.S. specifications can, under certain circumstances, be imported through a registered importer who modifies the vehicle to comply with U.S. equipment and safety regulations (DOT and NHTSA) and then certifies it as compliant, and an independent commercial importer who modifies the vehicle to comply with U.S. emissions regulations and then certifies it as compliant. Only vehicles properly converted to U.S. specifications can be sold and must be announced as such. 3. Seller Responsibilities Seller must inform Auction that a vehicle has grey market history at time of registration and must disclose that to the buyer in writing as an announced condition on all documentation supporting the transaction. 4. Proper Required Conversion a. If a vehicle was manufactured in Canada for the Canadian Market, the Manufacturer is required to obtain and affix a U.S. Safety Standard Certification Label to the vehicle. b. All other vehicles imported must be imported through a Registered Importer. Registered Importers are required to post a bond with the U.S. Department of Transportation and/or National Highway Transportation Safety Administration. All vehicles imported through a Registered Importer must have: i. U.S. Safety Standard Certification Label that identifies the Registered Importer ii. Valid U.S. Title or Legal Foreign Title iii. Meet ALL Federal NHTSA, D.O.T. and/or E.P.A. Mandated Guidelines iv. Documentation must be provided at any time by seller v. Cleared the mandated “wait” time.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 c. All vehicles, whether imported by a Manufacturer or a Registered Importer, must show miles per hour on the speedometer and miles traveled on the odometer. Title 49, United States Code, Chapter 327, Section 32704, allows replacement odometers without a door frame sticker if the conversion from kilometers to miles can be done without changing the distance traveled by the vehicle; therefore, replacement of an odometer under these circumstances does not have to be announced by the Seller. VII.

Arbitration Guidelines: Vehicles that have any of the defects outlined in Appendix I that were not disclosed by the seller or announced at the time of sale must be reported to Auction within the time frame noted below in order to be eligible for arbitration. The only exception is in the case of the purchase of a Post Sale Inspection (PSI). The purchase of this service may increase arbitration timeframes of items covered in the auction’s PSI policy. Vehicles must be returned to Auction in the same or better condition than when purchased with no more than (auction choice) miles. 1. Time Period-Refer to Appendix I for arbitration time periods. Sale day is Day 1. Arbitration shall end at the close of business as determined by each Auction on the last calendar day in the time period. 2. Process-Any single mechanical defect that has a repair cost of $500 or more is subject to arbitration on vehicles sold under qualifying lights and lack of announcement by the seller per Appendix I. Each vehicle transaction is allowed one chance at arbitration. The arbitrator will inspect only the defect that is on the initial arbitration form/documents claim. Repair costs will be determined by the auction and will reflect the auction cost to repair. 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. 3. Fees-Auction reserves the right to assess an arbitration fee to the Buyer. If the arbitration is valid, Auction reserves the right to assess an arbitration fee to the Seller in addition to any charges associated with the arbitration. 4. Not subject to arbitration: a. Vehicles exceeding 20 model years, with the exception of trailers, RVs, and watercraft, which cannot be arbitrated if they exceed 10 model years. b. Kit vehicles, homemade vehicles, or modified vehicles are sold “As-Is” and cannot be arbitrated for odometer, frame structural issues, warranty books, or model year. c. Noise and Inherent Conditions: No arbitration can be based on noises or conditions that are inherent or typical to a particular model or manufacturer. unless deemed “excessive” by the arbitrator on non-warranty items. OEM dealer Manufacturer warranty guidelines will be used where applicable to determine whether the condition is excessive inherent. Additional resources can be found on NAAA’s Standards page at www.NAAA.com. d. Manual Transmissions: Vehicles with standard (full or partial shift) transmissions cannot be arbitrated for manual clutches clutch assemblies unless the defect will not allow a safe test drive.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 e. Wearable Items: Auction will not arbitrate vehicles for wearable items normally worn vs excessively worn or inoperative (not inherent). For purposes of this policy wearable items are 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 Ownerâ&#x20AC;&#x2122;s Manual for routine check and replacement and would include, but are not limited to, air ride suspensions, tires, wipers, brake pads, shoes, rotors, belts, hoses, lubricants/fluids, timing belts, bulbs, filters, shocks and struts. f. Unsafe vehicles: Auction reserves the right to reject any vehicle that management judges to be unsafe. g. Vehicles may not be arbitrated based solely upon information provided in Electronic Data Vehicle Histories (EDVH) or printed EDVH reports. Auction and Seller are not bound by information listed in EDVH. Examples of EDVH include Carfax, AutoCheck, NMVTIS, etc. The facilitating Auction may investigate vehicle history based on information found in EDVH for information that may impact arbitration. h. Auction is not bound by vehicle grades or other types of scoring systems placed upon the vehicle. Buyers may only arbitrate a vehicle based upon damage or defects that were present at the time of the sale of the vehicle. i. Vehicles with more than (auction choice) miles from time of sale.

YES YES YES YES YES YES NO NO YES YES YES NO NO NO NO YES YES

YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES

YES

NO NO NO

NO YES NO

YES YES YES YES NO YES NO NO YES YES YES NO NO

YES

NO NO NO NO NO NO NO NO NO

Time Period VS. Sale Channel Breakdown "A" Inlane-Sale Day Only "B" Inlane-7 Calendar Days Only "C" Online-2 Calendar days within verified receipt of the vehicle from seller and/or auction not to exceed 10 calendar days from the original sale date *Must disclose defects that are singularly $500 or more to repair or replace. **These transactions may be subject to arbitration regardless of the stated time limits. Arbitration claims initiated after the stated time period will be addressed via the depreciation formula described in the "Title Arbitration Policy" (paragraph I).

YES

Any disclosure required by law

YES

YES YES

NO NO NO

YES YES YES

Other Issues

YES

YES YES YES YES NO NO NO NO YES

YES

Vehicle History Issues

YES YES YES YES YES YES YES YES YES

Pending state or local DMV fees or taxes over $100 due on vehicle (if required by law)

Vehicle Accessory Electrical Problems* (Current model year and up to 4 model years old) Paintwork (3 panels or more) on current model year and newer (excludes bumpers) Vehicles not equipped with air conditioning (excludes vehicles 10 model years old or older) Vehicles being sold with a government release for title (i.e. 27A, SF-97-1 & etc.), CO, MSO, or Repo Affidavit title (if required by law)

Structural Damage/Certified Structural Repair or Replacement/Structural Alteration per NAAA Structural Damage Policy Not Actual Miles/Inoperative Odometer Total Loss and/or Salvage Retention (by insurance records)** Theft Recovery/Stolen Vehicles (including history) Bonded, Insurance and/or Salvage titles (including history)** Flood Damage (By Auction Inspection) Lemon Law/Manufacturer's Buyback** State-Issued VIN plates (including kit vehicles) All Taxis & Livery requiring local or state licenses & Law Enforcement vehicles Previous Canadian vehicles Grey Market vehicles** Vehicles being sold with no title (Bill of Sale only) Voided Factory Warranty Fuel Conversion Non-Original Engine (excludes items replaced under Manufacturer's warranty) Current model year and up to 4 model years old Logo or Decal Misrepresentation Bio-Hazard vehicles (existing or cleaned) Flood Damage History (discovered by DMV and/or Insurance company records)

Disclosure/Announcement Required

Arbitration Time Periods

A or C A or C A or C 7 days after receipt of title 7 days after receipt of title 7 days after receipt of title

A or C A or C 120 Days

B or C

B or C B or C 30 Days B or C B or C B or C B or C B or C B or C B or C B or C B or C B or C

B or C

A or C A or C A or C A or C A or C A or C A or C B or C A or C

N/A N/A N/A 7 days after receipt of title 7 days after receipt of title 7 days after receipt of title

N/A A or C 120 Days

N/A

B or C B or C 30 Days B or C B or C B or C N/A N/A B or C B or C B or C N/A N/A

B or C

A or C A or C A or C A or C N/A N/A N/A N/A A or C

N/A N/A N/A 7 days after receipt of title 7 days after receipt of title 7 days after receipt of title

N/A A or C N/A

N/A

B or C B or C 30 Days B or C N/A B or C N/A N/A B or C B or C B or C N/A N/A

B or C

N/A N/A N/A N/A N/A N/A N/A N/A N/A

Green Light Only Yellow Light Only Red Light Only Green Light Only Yellow Light Only Red Light Only "Ride & Drive" "Limited Guarantee" "As-Is, No Arbitration" "Ride & Drive" "Limited Guarantee" "As-Is, No Arbitration" Major Components

Engine Problem* Cracked or Repaired Block* Transmission Problem* 4X4 System inoperable* ABS Problem* Emission Control equipment missing or inoperable* Air conditioning system* SRS-Missing or problem with airbags* Hybrid or Electric Vehicle Battery problems and/or missing or inoperable battery charger*

NAAA Seller Disclosure/Announcement Requirements

Appendix I. NAAA Arbitration Policy Guidelines

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017

VIII.

Structural Damage, Alteration or Certified Structural Repair or Replacement Policy

The purpose of the NAAA Structural Damage Policy is to define and clarify terminology associated with structural damage issues and to specify the disclosure requirements of the seller for vehicles offered at NAAA affiliated auctions. The policy is intended to provide adequate disclosure to the buyer for informed purchase decisions and to limit arbitrations for the seller. This policy, along with the main Arbitration Policy will serve as the primary criteria for all arbitration proceedings. 1. Definitions a. Vehicle Structure-The main loadbearing platform of a vehicle that gives strength, stability and design exclusivity and to which all other components of the vehicle are fastened. For purposes of this policy, there are three macro types: i. Unibody -A type of structure whereby the floor pan assembly, roof bows/braces, pillars, etc. are bonded together into one unit, thereby eliminating the need for a separate conventional frame structure. Unibody structures are typically shorter, sturdy and have thinner wall thickness. ii. Unibody on Frame-A type of structure whereby a unitized structure is bolted to a conventional frame structure. iii. Conventional Frame structure-A type of structure consisting of two symmetrical rails (beams) connected by various cross-members. b. UVMS-Used Vehicle Measurement Standard. The commercially acceptable measurement deviation from the vehicle’s original structural specification in order for any deviation not to be considered structural damage. c. Permanent Damage (aka “Kinked” or “Broken”)- The result of two or more objects striking or coming together at a significant change in velocity that permanently deforms the structural component(s) rendering it non-repairable per the manufacturer. 2. Recommended Disclosures a. Structural Damage-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. b. Certified Structural Repairs/Replacement-Repairs to a specifically identified structural component of a vehicle that has been certified to be within the Used Vehicle Measurement Standard (UVMS). c. Structural Alteration -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 3. Seller Disclosure Requirements

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 Sellers must disclose permanent structural damage, any structural alterations, structural repairs or replacements (certified or non-certified) as outlined in this policy prior to selling a vehicle at auction regardless of sales channel or light condition. Disclosures are required for the following: a. Any/all existing permanent (non-repairable aka kinked or broken) structural damage as defined in this policy b. Improper and/or substandard prior repairs (not meeting OEM repair guidelines) c. Repairs not certified using OEM guidelines or to be within the UVMS Improper alterations to the structure Lengthened or Shortened structure verified by visual inspection. d. Altered suspension that requires the structure to be modified from its OEM form. e. After-market accessories installed or removed to the structure. f. Towing packages installed (or removed) where new holes are drilled, OEM holes are enlarged, or if the towing package is welded or brazed to the structure. g. Multiple access holes (regardless of size) or singular access holes greater than 5/8". Access holes between 1/4" and 5/8" are subject to disclosure based upon location and condition of structural component. h. Corrosion of structural components determined by one or more of the following; when the substrate loses its shape, the original bonds near the affected area are loose or are no longer in existence, the original thickness of the substrate has been reduced changed by more than 25%, the affected area can no longer possesses its absorption or deflection properties. i. Structural tear damage (i.e. transport tie down) if more than 1" in length (measured from tear start/stop points) j. Damage due to improper jacking or lifting that permanently deforms structural components outlined in this policy. k. Damage due to contact with parking abutments and/or road debris that permanently deforms structural components outlined in this policy. l. Roof bows/braces that have been modified, have existing permanent damage or removed. A replaced roof skin is not a required disclosure in terms of the Structural Damage Policy. m. The C pillar/quarter or Cab panel may or may not be a structural component(s) as per the vehicle manufacturer. 4. Arbitration Rules for Structural Damage, Alteration, Certified Repairs or Certified Replacement a. A vehicle may be arbitrated if it has undisclosed existing permanent damage alteration, Certified Repairs or Certified Replacement, which should have been disclosed under this policy, even though the vehicle is within the UVMS. If a structural damage issue is properly disclosed, the vehicle may only be arbitrated for improper repair of the designated area, existing permanent damage or repairs to other areas of the vehicle not disclosed, or for failure to be within the UVMS that was verified by visual inspection. b. In the event that structural alteration is disclosed on a vehicle, the vehicle may only be arbitrated for damage or repairs to structural components other than those disclosed or in the event of improper alteration.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 c. Damaged or replaced radiator core supports or rear body panels do not require a structural disclosure under this policy. d. Damage to the aprons, rail floor pan assembly, inner wheelhouse (upper or lower), D pillar (if equipped) or other ancillary structural components on a unitized structure in the area where the radiator core support or rear body panel attaches will require a disclosure if permanent damage exists. e. Brazed exhaust hangers are not a required disclosure under this policy. f. Facilitating auction will, at its discretion, have a vehicle measured according to the UVMS at a facility of its choice. Prior to sending the vehicle for measurement, the auction reserves the right to complete a visual verification of the physical condition of the vehicle to determine that it should be measured. If the measuring facility determines that the vehicle is within the UVMS, the buyer of the vehicle will be responsible for the charges paid to the facility. Likewise, if the measuring facility determines that the vehicle is not within the UVMS, the seller will be responsible for the charges paid to the facility. g. Visual evidence supersedes any/all mechanical or electronic measurements. h. For measurements according to the UVMS, the following guidelines will apply: i. The vehicle structure must measure to a total tolerance of no more than +/- 8 millimeters (mm) of published specification of length, width and height at control points that capture the front (2), center (4) and rear (2) sections of the vehicle. ii. Symmetrically (comparative measure from side to side and point to point based on point measurement), the length, width and height must measure to a difference of no more than 6 mm. Upper body measurements (tram gauge) by themselves will not be adequate. i. Buyer must arbitrate any/all structural misrepresentations as outlined in this policy within published timelines (outlined in the main Arbitration Policy Guidelines) from date of purchase (purchase day counts as Day One). j. The buyer must contact and follow the arbitration process of the auction where the vehicle was purchased including the auctionâ&#x20AC;&#x2122;s direction for return of the vehicle and the timeframe allowed for the vehicle to be returned. k. In the event of improperly disclosed structural damage by the seller, the buyer will be entitled to reimbursement in accordance with the main Arbitration Policy.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 Structural Components 1 2 3 4 5 6 7 8 9 10 11 12 13

Unibody

Structural Damage Disclosure Requirement Unibody on Conventional Frame

Conventional Frame

Frame Rails Existing Permanent Damage, Removed, Modified, Repaired, or Replaced (Including front, center and rear rails) Existing Permanent Damage, Removed, Modified, Repaired, or Replaced N/A Spring Pod, Torque Box or Stabilizer Mount Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Cross Members (except bolt-on) Apron Assembly Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Strut Tower Assembly Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Cowl Panel/Firewall Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Support Pillars (includes A, B, C*, D) Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Roof Braces/Bows Replacement Only Rocker Panel (Outer) Existing Permanent Damage, Removed, Modified, Repaired, or Replaced Rocker Panel (Inner) Tears 1" or more, existing Permanent damage, removed, modified, repaired or replaced panels Floor/Trunk Panels Replacement Only Quarter* or Cab* Panel Inner Quarter Panel Assembly Existing Permanent Damage, Removed, Modified, Repaired, or Replaced (includes inner wheelhouse panel, rear strut tower, & wheelhouse extension lower) *Only applies to components deemed structural per the vehicle manufacturer.

N/A N/A N/A

N/A N/A N/A N/A N/A

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017 IX.

Flood, Puddle or Stream Policy

Vehicles are frequently exposed to moisture during their ordinary operation, maintenance, and reconditioning. Occasionally, such exposure may leave residual marks or indicators similar to those left by exposure or immersion of the vehicle in floodwater. In determining what conditions require disclosure or in arbitrating vehicles for flood exposure/damage it is critical that the total condition of the vehicle be considered including VIN data history. 1. Disclosure Not Required-No disclosure is required nor is arbitration allowed for the following types of water exposure, provided that none of the components outlined below are damaged: a. Rain, snow or sleet due to open windows, doors or tops or leaking seals. b. Car wash or rinse water. c. Carpet or upholstery shampooing or cleaning. d. Stream, pond, puddle or floodwater that does not rise above the rocker panel or otherwise enter the passenger compartment. e. Stream, pond, puddle or floodwater that enters the luggage compartment, but does not damage any electrical components (such as lighting or wiring harness) or does not enter the passenger compartment. 2. Disclosure Required-Disclosure is required and arbitration shall be allowed under the following conditions: a. The title has been correctly branded indicating flood history of the vehicle. b. Any of the following components have been damaged due to stream, pond, puddle or floodwater immersion/ingress: i. Front or rear internal lighting or wiring harnesses ii. Engine and its major components iii. Transmission and differential iv. Dash instrument panel and wiring v. Passenger seat cushions vi. Power seat functions or window motor vii. Major sound system components 3. Recommended Disclosure -The recommended disclosure is “Flood Damage.” This declaration should be made whenever existing or prior flood damage is found and therefore requires disclosure. While the vehicle is recommended to be sold under the red light, the disclosure “Flood Damage” is required for all sale lights except the “red/yellow As-Is, No Arbitration” light combination.

NAAA Arbitration Policy (RED LINE=OMIT, GREEN LINE=ADDED) 2017

NAAA Vehicle Condition Grading Scale Grade 5 - Vehicle in excellent condition • PAINT & BODY - Only minor defects in panel surfaces requiring no conventional body or paint work - May have had limited high quality repairs performed - No missing, broken, or damaged parts that require replacement - No visible glass damage • INTERIOR - No missing, broken, or damaged parts that require replacement - No cuts, tears, or burns that require repair - Shows no signs of wear - No noticeable offensive odor • FRAME/UNIBODY - Frame/structure has not been repaired or altered - Expected to measure to published specifications • MECHANICAL - Mechanically sound - All accessories are operable - All fluid levels full and clean • TIRES - All match by brand, size and style - Near new condition. Grade 4 – Vehicle is better than average • PAINT & BODY - Minor chips or scratches in panel surfaces requiring minor conventional body and paint work - May require removal of small dents that have not broken the paint using Paintless Dent Repair - May have had high quality conventional repairs of cosmetic or light collision damage - May require replacement of minor missing or broken part - No visible glass damage beyond minor pitting of windshield • INTERIOR - Clean, showing minimal wear - May require replacement of minor missing or broken part - No noticeable offensive odor • FRAME/UNIBODY - Frame/structure has not been repaired or altered - Expected to measure to published specifications • MECHANICAL - Mechanically sound - All accessories are operable - Fluids may require service • TIRES - All match by brand, size and style - Good or better condition. Grade 3 – Normal wear and tear • PAINT & BODY - May require conventional body and paint work - May require replacement of parts - May have sustained cosmetic or light collision damage and been repaired to collision industry standards - Windshield may be damaged • INTERIOR

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- Shows signs of normal wear and usage - May require repair or replacement of parts FRAME/UNIBODY - Frame/structure has not been repaired or altered - Expected to measure to published specifications MECHANICAL - Mechanically sound - May require maintenance - May require minor repair of accessories - Fluid levels may be low or require replacement TIRES - Average or better - Match by size and style

Grade 2 – Shows signs of excessive wear and tear • PAINT & BODY - Dents, scratches, and body panels that may require replacement - Parts may be broken and missing - May have multiple prior repairs performed at substandard levels - May have repaired or unrepaired collision damage • INTERIOR - Shows signs of excess wear - May have burns, cuts, tears, and non-removable stains • FRAME/UNIBODY - May have repaired or unrepaired frame/structure damage - May not measure to published specifications • MECHANICAL - May have mechanical damage that prohibits vehicle from operating properly - Engine and/or transmission may be in poor condition - Operability of accessories is questionable • TIRES - May be worn or mismatched Grade 1 – Shows signs of severe abuse - May have sustained major collision damage, but may be drivable - May be cost prohibitive to extensively recondition this vehicle by automotive industry standards - Frame/Structure may not measure to published specifications - May have missing or disconnected mechanical parts - Although operable, this vehicle is near the end of its useful life - Operability of accessories is doubtful Grade 0 – Vehicle is inoperative - Good for parts only - Mechanical and body parts may be inoperable, disconnected, damaged or missing Frame/Structural Note: Frame damaged vehicles will not exceed a grade value of 2. Frame/Structural Damage is defined in the NAAA Structural Damage Policy. The disclosures required by this policy must be made for grade 2 and lower vehicles if there is existing structural or frame damage, repair or alteration. This policy may be viewed at: http://www.naaa.com/NAAA/documents/9_2007StructuralDamage.pdf

Flood Note: Flood damaged vehicles will not exceed a grade value of 2. Flood Damage is defined in the NAAA Water/Flood Damage Policy. The disclosures required by this policy must be made for grade 2 and lower vehicles if there is existing or repaired water/flood damage. This policy may be viewed at: http://naaa.com/html/ethics_standards/standards_detail.cfm?std=1022 THIS GRADING SCALE IS INTENDED TO COMMUNICATE A VEHICLE’S GENERAL APPEARANCE AND CONDITION. A DETAILED VEHICLE CONDITION REPORT SHOULD BE REVIEWED BEFORE ANY VEHICLE VALUATION DECISION IS MADE. OTHER FACTORS, SUCH AS MILEAGE AND STRUCTURAL DAMAGE/REPAIR DECLARATIONS MAY HAVE A SIGNIFICANT IMPACT ON A VEHICLE’S VALUE AND SHOULD BE CONSIDERED. DISPUTES REGARDING A VEHICLE GRADE ARE NOT GROUNDS FOR ARBITRATION.

Grade 5 – The vehicle is in excellent condition, with only minor defects in panel surfaces which do not require conventional body or paint work. Limited high quality repairs may have been performed. There are no missing, broken, or damaged parts and no visible glass damage. The vehicle’s frame/structure has not been repaired or altered and is expected to measure to published specifications. The interior has no cuts, tears, or burns, does not show signs of wear and has no noticeable offensive odor. The vehicle is mechanically sound and all accessories are operable. All fluids are full and clean. Tires match by brand, size and style, and are in near new condition. Grade 4 – The vehicle is better than average with only minor chips or scratches in panel surfaces which may require minor conventional body and paint work or paintless dent repair. The vehicle may have sustained cosmetic or light collision damage and received high quality repairs. The vehicle’s frame/structure has not been repaired or altered, and is expected to measure to published specifications. A minor missing or broken part may require replacement. The interior is clean, shows minimal wear and has no noticeable offensive odors. There is no visible glass damage beyond minor pitting of the windshield. The vehicle is mechanically sound and all accessories are operable. Fluids may require service. Tires match by brand, size and style and are in good condition. Grade 3 – The vehicle has normal wear and tear (for example, parking lot dings, small scratches, chips and/or minor broken parts). It may require minor conventional body and paint work or replacement of parts. The vehicle may have sustained cosmetic or light collision damage and been repaired to collision industry standards, but its frame/structure has not been repaired or altered and is expected to measure to published specifications. The interior shows signs of normal wear and usage, requiring repair or replacement of parts. The windshield may be damaged. The vehicle is mechanically sound but may require maintenance or minor repair of accessories. The fluids may be low or require replacement. Tires match in size and style and be average or better. Grade 2 – The vehicle shows signs of excessive wear and tear. The body may have dents, scratches, and body panels that require replacement. Parts may be broken and missing. The interior may show signs of excess wear with burns, cuts or tears, and non-removable stains. The vehicle may have multiple prior repairs performed at substandard levels or unrepaired collision damage. The frame/structure may be damaged, repaired or altered and may not measure to published specifications. The vehicle may have mechanical defects that prohibit it from operating properly. Repairs can be made, but the engine and/or transmission may be in poor condition. Operability of accessories is questionable. Tires may be worn or mismatched. Grade 1 – The vehicle shows signs of severe abuse or may have sustained major collision damage. It may be cost prohibitive to extensively recondition this vehicle by automotive industry standards. The frame/structure may be damaged, repaired or altered and may not measure to published specifications. The vehicle may have missing or disconnected mechanical parts. Although operable, the vehicle is near the end of its useful life. Operability of accessories is doubtful. Grade 0 – The vehicle is inoperative. Mechanical and body parts may be disconnected, damaged or missing. The vehicle’s condition renders it suitable for dismantling or scrap. Frame/Structural Note: Frame damaged vehicles will not exceed a grade value of 2. Frame/Structural Damage is defined in the NAAA Structural Damage Policy. The disclosures required by this policy must be made for grade 2 and lower vehicles if there is existing structural or frame damage, repair or alteration. This policy may be viewed at: http://www.naaamap.com/NAAA/documents/2007Structural_Damage.pdf Flood Note: Flood damaged vehicles will not exceed a grade value of 2. Flood Damage is defined in the NAAA Water/Flood Damage Policy. The disclosures required by this policy must be made for grade 2 and lower vehicles if there is existing or repaired water/flood damage. This policy may be viewed at: http://www.naaamap.com/NAAA/documents/water_flooddamage.pdf THIS GRADING SCALE IS INTENDED TO COMMUNICATE A VEHICLE’S GENERAL APPEARANCE AND CONDITION. A DETAILED VEHICLE CONDITION REPORT SHOULD BE REVIEWED BEFORE ANY VEHICLE VALUATION DECISION IS MADE. OTHER FACTORS, SUCH AS MILEAGE AND STRUCTURAL DAMAGE/REPAIR DECLARATIONS MAY HAVE A SIGNIFICANT IMPACT ON A VEHICLE’S VALUE AND SHOULD BE CONSIDERED. DISPUTES REGARDING A VEHICLE GRADE ARE NOT GROUNDS FOR ARBITRATION.