Certified Pre-Owned Vehicles Offer an Affordable Alternative

Certified Pre-Owned Vehicles Offer an Affordable Alternative

Ever heard of a certified used car? They offer an affordable alternative to new cars while still delivering a like-new ownership experience. Certification programs for used cars, which first emerged in the 1990s and are now offered by most manufacturers, continue to be popular.

Sales of certified used cars have increased nearly 50 percent since 2000, according to J.D. Power and Associates. For many car shoppers, certified used cars have become affordable alternatives to new cars.

In the world of Cadillacs for example, “it’s a value thing,” says Dennis McGrath, sales manager at Bommarito Cadillac in St. Louis. “In some cases they (car buyers) want a luxury car but can’t afford brand new, so they go the other direction and purchase a certified preowned car.”

Speaking of Cadillacs and luxury cars, KBB.com says that most Certified Preowned or CPO programs originated in the luxury category because of the high rate of off-lease vehicles populating the automotive market in the recent past. Because these vehicles were in great shape and generally had lower mileage, manufacturers took a serious interest in ensuring that they delivered a positive purchase and ownership experience. As a result, manufacturers began to “refurbish” these vehicles and add warranties and special financing.

“Luxury car buyers tend to have low mileage on their cars when they trade them in,” McGrath explains. So, with these low-mileage cars in stock, CPO programs have “become a popular and robust part of our business.”

More recently, CPO programs have expanded beyond the luxury segment. Joe Gray, general manager of North Star Chevrolet in Pittsburgh, says his customers favor certified Chevy cars “because of the overall quality of the vehicles, the detailed inspection checklists that add credibility and provide consumer peace of mind…and buyers don’t really pay that much more for these cars” as they would for other, non-certified used cars.

The Warranty
That consumer peace of mind that Gray mentions also is made possible by a major component of these CPO programs: extended warranties directly from the manufacturer (dealers and other third parties also sometimes offer CPO programs and warranties). Warranties vary widely by manufacturer, but generally have mileage limits of less than 100,000, include vehicles that are under five years old and typically have coverage that’s good for four to six years.

McGrath says Cadillac’s CPO program covers models that are from one to four years old, and provides a six-year (from original inception dates of the vehicle), 70,000-mile, bumper-to-bumper warranty, “much like a new car,” says McGrath. “In the last five years or so, manufacturers have been very aggressive with CPO programs and in the last two years, (Cadillac) programs have been handsomely enhanced. They literally protect the car as if you bought a brand new car.”

Gray says Chevrolet’s warranty goes back five model years or up to 75,000 miles.

Regarding warranties, Consumer Reports Magazine advises doing due diligence. Before signing on the dotted line, buyers should find out whether a manufacturer-certified program or a third-party plan covers the vehicle. “Non-manufacturer plans are wild cards because they can vary greatly in quality.” Also, find out what the warranty covers and for how long. Additionally, is there a deductible? If there is a charge for service, find out how much it is and whether you must pay it for each item serviced or for each service call. Plus, find out who provides the service.

Ultimately, though some CPO cars may cost hundreds or even thousands more than non-certified cars, the added maintenance schedules and inspections and warranties may be worth the price to provide peace of mind. As Gray says, “As far as the consumer is concerned, you are buying a higher quality car.”

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