Cars - Used and Improved? Buying Certified Pre-Owned Car

The idea of paying top dollar for a new car and getting hit with double-digit depreciation as soon as you roll off the dealer's lot is about as appealing as having a one-night stand with a hottie who gives you an initating STD. Similarly distasteful is having to compromise on style, amenities, and performance because you don't want to spend a fortune. But the alternative is just as repulsive: buying sameone else's problems in the form of a used car. So what is a guy supposed to do when he wants it all: new-car peace of mind combined with used-car value? The solution is as simple as C-P-O, or certified pre-owned. This recently recognized retail category-joining "new" and "used" at a dealer near you-is hot, hot, hot. But don't take our word for it; the numbers speak for themselves. In 2001, 816,000 CPO vehicles were sold in the U.S. Five years later, that figure is expected to almost double, to an estimated 1.5 million, according to CNW Marketing Research, Inc., a consulting firm that tracks auto-industry trends.

So what exactly is a CPO vehicle?

It's a used vehicle that has been reconditioned into like-new shape-inside and out-and then guaranteed as such by the manufacturer. To become certified, a vehicle must pass a rigorous dealer inspection. How rigorous depends on the automaker, but most companies inspect anywhere from 100 to 300 reference points on every car. For an example of the level of detail thafs involved in these assessments, take a look at the official BMW Vehicle Inspection Checklist, which can be found either online or at your local dealer. One of the many items on the list requires the technician to measure the tread depth of the inside, center, and outside grooves on all four tires and the spare. If a part or system isn't up to factory specification, it must be fixed or replaced.

In addition, most car companies require candidate autos to be less than five years old and to have fewer than 80,000 miles on the odometer. The age and mileage limits help ensure that only rides with the most life left in them are considered, reducing the likehood that you'll end up with a lemon.

And finally, the vehicle always comes with a warranty, which can range in length from three months to several years, depending on the manufacturer.

Who came up with the genius idea of "certifying" used cars?

The practice originated a decade ago as a means for luxury brands like Lexus and Mercedes-Benz to resell vehicles returned at the end of a two-or three-year lease. When the masses discovered that CPO vehicles were available and that they could buy more car for less money, sales of these revamped machines began to heat up. Today, the CPO market has grown to include 35 car builders ranging from Acura to Volvo, among them some exotic and !imited-production makes such as Bentley and Ferrari. Furthermore, these automobiles account for 38 percent of all used-car sales, according to J.D. Power and Associates.

What's wrong with buying a plain old used car?

Although "as is" sales (read: no warranty-what you buy is what you get) account for the majority of automobiles sold on the used-car market, vehicles bought this way often come with problems, which can range from minor maintenance annoyances like worn hoses to migraine-inducing mechanical nightmares such as clogged or damaged fuel injectors. The bottom line: Certified pre-owned cars are generally in much better condition than as-is rides.

So there's nothing right about buying an as-is used car?

That's a bit strong. Some consumer advocates think an a la carte approach to buying a used car can work just as well as, or better than, going CPO. That means having the car you're interested in inspected (starting at around $100) by an experienced and trusted mechanic and, if it's up to snuff, buying an extended warranty or service contract from the dealer on the side. A few used-car dealers and independent warranty companies have "certification" programs, but they offer very dubious value. A recent Consumer Reports survey shows that vehicles backed by the manufacturer tend to be newer and less troublesome than those backed by dealerships alone.

Unless you're a knowledgeable buyer- that is, someone who has at least a little mechanical aptitude-going the all-in-one CPO route will save you the hassle of having your car inspected and researching and purchasing a warranty or dealer-sponsored program seperately.

Are all CPO programs the same?

The inspection procedure and standards for vehicle eligibility are similar from one manufacturer certification program to another. However, warranty length and coverage are often quite different.

You can either cobble together detailed, side-by-side program comparisons from the manufacturers' websites-such as on your own, or, better yet, you can turn to market-research firms that have already done the legwork for you.

So how much is certifieation going to cost me?

That depends on the type of vehicle you're looking for (sports car versus minivan, for example) and what part of the country you're planning to make the purchase in. On average, we found that certification adds between $1,200 and $1,800 to the cost of an equivalent as-is used model.

Can you negotiate the sticker price?

Damn straight! Just because a vehicle is certified doesn't mean you can't haggle with the salesman. But make sure you do some research on the value of the car before starting any negotiations. Ideally, you want to pay a sticker price that's midway between the retail and wholesale values.

Are CPOs available online?

Almost everything is available in cyberspace. You can find CPOs on every major automaker's website, as well as on a number of used-car buying sites. Happy hunting! -MARY S. BUTLER

Source: Cargo Magazine