Why Certified Pre-Owned Sales Programs Work

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Photo by Randy Stern

One of the biggest suggestions I received by anyone associated with me has to do with car shopping. She suggested that I look into a Certified Pre-Owned vehicle. In her case, it's usually Certified Pre-Owned premium brands of European extraction. Still, for those of us on tighter budgets looking for solid transportation that is well-built, better covered and above-average service, this is a direction to go.

So, what's so important about Certified Pre-Owned vehicle sales schemes?

In the past, used cars were pushed out like cattle onto a freight train. Rarely will you find a good one, but it comes with a very limited warranty. On the average, a used car has three months coverage from the time of the resale. One would be lucky to get one off a lease where some of the factory warranty is still in play. Then again, many automakers tacked on clauses voiding warranties if sold by the original owner.

This is where Certified Pre-Owned programs come into play. Considering there are a lot of fantastic pre-owned cars on dealer lots, manufacturers decided to implement a rigorous inspection process for vehicles within a certain age limit. The most common vehicles you will find in this program are former rental cars, former leased vehicles and short-term trade-ins. A lot of these cars are found via auction where they fit the criteria of the program.

After they pass inspection, these vehicles are given a factory-backed warranty. Most likely, the Certified Pre-Owned vehicle is given up to six years of coverage after the original date of sale. A factory sticker explains the coverage as well as gives all equipment information along with a set price for the vehicle. This helps consumers know that the guessing game of finding a good pre-owned car has been eliminated for the most part.

You can search for a Certified Pre-Owned vehicle through the manufacturer's website, which draws directly from inventories of dealers participating in the program. With every listing online, most programs offer a free CARFAX report on each model. A CARFAX report eliminates the guesswork of a car that may or may not have problems in the past before being offered for resale. It also helps alleviate my fear of getting "someone else's problem" instead of a car I truly like.

This was put to the test at a Lexus dealer in the Twin Cities. I found five 2014 ES 350 models, four just happened to have the same price. I compared three different ES 350s, one with a price that was $1,000 less than the other two. The lower priced one was in silver had over 44,000 miles on the odometer and was well-equipped with the Premium package. The first of the same-priced ones had only over 26,000 miles in gray. It appeared to have the same equipment as the lower priced car. The third one was in black with over 58,000 miles on the odometer. The black car had mor e equipment than the other two, including the Luxury Package and Park Assist.

With a choice of three vehicles within $1,000 of each other, the dealership assured me that they were all under the Lexus L/Certified program. Their program included a two-year, unlimited mileage warranty after the expiration of the factory warranty and two years of complimentary scheduled maintenance – up to 20,000 miles from the date of purchase in the program. If I took into consideration thge warranty coverage alone, it may be prudent to look at the gray 2014 ES 350 with 26,000 miles, as I see the potential of being covered through 2020. That, or saving money on the silver one with more miles, but warranty coverage through at least 2019.

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Certified Pre-Owned programs are found across the automotive spectrum. General Motors has one of the largest programs encompassing all of their brands. Their core program covers Chevrolet, Buick and GMC, while Cadillac offers their own specific warranty and inspection procedure. CARFAX reports are available for most vehicles listed, however not all GM dealers participate in having CARFAX reports attached to their listings. This is indeed an issue across the board as consumers are demanding information to make their purchase decision a sound one.

However, certified pre-owned programs are not created equal. While Lexus adds an additional two years onto the basic warranty of their L/Certified vehicles, others either provide a complete warranty for a set timeframe and mileage restriction from the original date of new car purchase to an additional year on top of the current warranty. There are some manufacturers that may charge you a deductible against warranty repairs, while other do not. You might even transfer the certified program warranty onto the next buyer of that vehicle – or not. Plus, check on any other benefits of purchasing a certified pre-owned vehicle. This includes roadside assistance coverage and complimentary scheduled maintenance.

One thing to look for is what each certified pre-owned program actually offers. It is worth reading the fine print of these programs before buying anything from the dealership. Plus, ask questions. One should be as to who facilitates warranty claims within these programs. If the dealer does so on behalf of the manufacturer, then you chose the right certified program. If not, find out everything about the third-party warranty and roadside assistance provider. Every step of diligence you do helps in ensuring a problem-free purchase of a certified pre-owned vehicle.

The key to going through a certified program is to reduce overall risk. Buying a vehicle not under a certified programs puts customers at risk of paying for problems and other unexpected cost during the time of ownership. While you do pay more for a certified pre-owned vehicle, there are savings to be had once going through the program. In particular, when the certified program is fully facilitated by the manufacturer.

For those of us wanting to take a risk on a Pre-Owned car, you can dive through the ads in the paper, online or any dealer lot anywhere. However, if you're looking to minimize your risk when buying a used car, go with one of the Certified Pre-Owned sales programs. A good consumer always want to minimize risk.

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