Topic: Feature: Certified Used Vehicles

[Autos_Editor]

In these challenging economic times, certified used cars are proving an attractive alternative to new cars.

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[Gardiner Westbound]

Don't drink the Certified Pre-owned (CPO) Kool-Aid. It's a marketing gimmick to separate buyers from
more of their cash. Quality is suspect, even with luxury brands. Carrying a 10- 30 percent price
premium, the cars are not good value. The purchaser is really paying a stiff price for a dubious
extended warranty and, maybe, a superficial reconditioning. Some dealers do the bare minimum;
motor, transmission and cooling system fluid changes and a clean up. Others try to persuade shoppers
the warranty eliminates the need for their own trusted mechanic's pre-purchase inspection. It doesn't!

[sailor723]

Don't drink the Certified Pre-owned (CPO) Kool-Aid. It's a marketing gimmick to separate buyers from
more of their cash. Quality is suspect, even with luxury brands. Carrying a 10- 30 percent price
premium, the cars are not good value. The purchaser is really paying a stiff price for a dubious
extended warranty and, maybe, a superficial reconditioning. Some dealers do the bare minimum;
motor, transmission and cooling system fluid changes and a clean up. Others try to persuade shoppers
the warranty eliminates the need for their own trusted mechanic's pre-purchase inspection. It doesn't!

While I'm not quite as cynical as this poster he does raise a valid point as to value. While I think CPO'd cars are often very good, given the price premium you are paying a fairly hefty fee for an extended powertrain warranty. I'm not sure the best used car buy still isn't a locally owned vehicle with service reords and a clean inspection bought through a private sale. Hard to find but often worth the search.

[tpl]

yes, but.    How many BMWs, M-Bs Audis etc. are actually bought not leased?   I guess that for CPO-able cars ( low mileage, perfect condition) 90% go back to the dealer at lease end who will sell them CPO, there will be very few sold privately.

[Thinking Out Loud]

yes, but.    How many BMWs, M-Bs Audis etc. are actually bought not leased?   I guess that for CPO-able cars ( low mileage, perfect condition) 90% go back to the dealer at lease end who will sell them CPO, there will be very few sold privately.

  

....if I were in the market for an Audi, Merc or Bimmer, I'd go CPO.  If you are paying $30,000++ for a USED car, what is another $1,000 (or whatever) for one that give you absolute authority to put the boots to the dealer if it doesn't perform as advertised?   

[nlm]

GMs 30 day/2,500kms exchange policy is a good idea but their 3 month warranty is a joke.

[aaronk]

So the warranty's for these...are we talking the Lubrico BS or a real warranty from the manufacturer? I just read VW's Certified used car program - they really don't offer any additional warranties unless you pay for a 'premium warranty'. The only thing you get is 6 months of roadside assistance, a 112-point inspection (whether or not they fix problems they find is another thing) and a Carproof report. Wouldn't you be better off just being a smart consumer and look for a non-certified used car that has a service history? Pay for the $40 carproof and you've just saved $1,450.

[redman]

I recall from my previous years of working at dealerships that not all vehicles met CPO. If the vehicle cost to much to bring up to CPO standards it was sold as a regular used car.

I would be more confident buying a different brand i.e. Honda at a Toyota dealership than a non CPO Toyota at a Toyota dealership.

Only dealership specific brands can be CPO and if they fail not to be they are either to old, high mileage or in bad shape.

[Soram6275]

Thanks Greg for a very informative article.  I often thought of getting a BMW or Merc the CPO route and save myself some money.  It's nice to have that complete summary on page 2.  Saves us time googling this shiznit.

[Mike]

I recall from my previous years of working at dealerships that not all vehicles met CPO. If the vehicle cost to much to bring up to CPO standards it was sold as a regular used car.

I would be more confident buying a different brand i.e. Honda at a Toyota dealership than a non CPO Toyota at a Toyota dealership.

Only dealership specific brands can be CPO and if they fail not to be they are either to old, high mileage or in bad shape.

That was always my thoughts on CPO.  Not so much for the warranty, but for the fact it was 'as good as new' when buying it.

[nlm]

Finance interest rates are often below 1% on cars in the program as well.

IMO this is the real carrot to going CPO route: most of the depreciation is taken care of WITH decent financing.

[dkaz]

Toyota also has a good program. 12 mo/20,000km warranty or balance of factory warranty, whatever is greater, with the option to purchase more, and very good financing rates.

[aaronk]

Toyota also has a good program. 12 mo/20,000km warranty or balance of factory warranty, whatever is greater, with the option to purchase more, and very good financing rates.

Now they just need to start selling interesting cars... 

Does that apply to Scion?

[ArticSteve]

yes, but.    How many BMWs, M-Bs Audis etc. are actually bought not leased?   I guess that for CPO-able cars ( low mileage, perfect condition) 90% go back to the dealer at lease end who will sell them CPO, there will be very few sold privately.

there will be very few sold privately.

Yours was probably the last.

[ArticSteve]

I'm familiar with the Audi and MB certified used programs and there's no question that this is the way I'd go looking for a used car. The warranty is legit and usually a combo of remaining new car warranty plus the extended warranty (which is not 3rd party). Most amount to 5 years or so. Finance interest rates are often below 1% on cars in the program as well. Purchase price comes down to your ability to negotiate like every other situation. I don't really think these cars are necessarily special so you have to evaluate the vehicle like you would in any other situation.

Good post.  Ya, CPO cars aren't particularly special.  Always the low milers which isn't necessarily a good thing.  You can take a car that hasn't been washed for 3 years with bumper scratches and for $300 make it look like the day it was made.

I agree the key lies in the financing offers. 

[johngenx]

I don't know about other makes, but I've never heard of a Mercedes dealer selling an aftermarket warranty.  Mercedes offers a wide range of factory warranty products, and if a used car has an extended warranty, that warranty coverage is going to be excellent.  I've owned a few brands, and I've never had warranty service like Mercedes.  Dealers always go over the car with a fine toothed comb, looking for anything that might be covered.  Also, Mercedes never took shortcuts when it came to repairs.  I had a few instances where MB Canada could have saved bucks through a repair, but instead replaced very expensive components.

My Dad bought a CPO Mercedes, and it wasn't much more than he would have paid anywhere else for one with similar mileage/condition/records, etc.

We looked at some CPO Lexus RX models, and they all had very detailed/excellent service records.

I don't think the Subaru CPO program is worth a nickle.  I looked at a late model Outback, and it seemed no better than any other used Outback, had limited records, and they were asking a huge premium.

[dirtyjeffer]

I'm familiar with the Audi and MB certified used programs and there's no question that this is the way I'd go looking for a used car. The warranty is legit and usually a combo of remaining new car warranty plus the extended warranty (which is not 3rd party). Most amount to 5 years or so. Finance interest rates are often below 1% on cars in the program as well. Purchase price comes down to your ability to negotiate like every other situation. I don't really think these cars are necessarily special so you have to evaluate the vehicle like you would in any other situation.

exactly...when i was looking at some MB products last year, they offered a 6 year (can't recall the exact mileage, maybe 160,000 km) warranty from the date it was "in service"...most cars were 3-4 years old (4 being the tops), meaning you basically received 2-3 years of full warranty, which was fairly decent...all their CPO cars looked as good as new (if you weren't familiar with the models, you wouldn't know they were new) and were fairly low mileage as well...i won't be in the market for another vehicle for some time, but i might consider a slightly used vehicle next time around, and that new GLK diesel has curious.

[Karumba]

Just went to check out a CPO honda today ... Visors scratched up, interior door trim uneven, scratches on the body, and the car couldn't even start without a battery boost.  Ok, so I can see they've vacuumed the interior.  Not quite sure exactly what they've done to classify it as a certified pre-owned ...

[greengs]

I just bought my 3rd CPO bmw 2 months ago.  Paid on par what they go for on kijiji privately, got 1.9% financing and the car has brand new tires, brakes, fresh oil, valve cover gasket, and it looks 95% new.  I found that if you're after a RWD one of these they discount them very sharply haha.

It has 2.5 yrs of BMW (not 3rd party) warranty left on it.  I've never kept one past the CPO but every time I've taken them in I got loaners or rides to work free of charge, complimentary car wash etc. I'd never own one of these cars outside of warranty however 

[Triple Bob]

Everyone (apart from the poster above) seems to be missing the point completely.  It's not about warranty, although that is helpful.  It's also about the ridiculously good rates.  BMW offer a full warranty AFAIK and rates from 0.9% to 1.9%.  Many manufacturers won't meet that on NEW cars let alone 3yr old ones...