- The Washington Times - Friday, March 8, 2002

A number of automakers have taken to the television airwaves and the pages of newspapers to advertise not only new cars but also used cars "certified preowned" ones. Some automakers have even displayed these certified used cars alongside spanking new ones at auto shows.

Indeed, certified preowned vehicles represent a growing segment of the more than 45 million used vehicles three times the number of new ones sold every year. According to a recent BMW/Dohring Company poll of used-vehicle buyers, more than half (56 percent) said they would consider purchasing a certified preowned vehicle. A majority of those surveyed (52 percent) have an increasingly favorable impression of certified preowned programs and have very high expectations for what these programs can deliver.

Automobile manufacturers created certified preowned programs in the mid-1990s in response to the glut of used cars on the market, caused, in part, by the large volume of late-model used vehicles returning to dealerships when leases expired. They also wanted to tap into the huge pool of used-car buyers, which outnumber new-car buyers three to one. Now, all but a few manufacturers have instituted the programs.

The certified used-car programs basically work the same way. Generally, only late-model, relatively low-mileage used cars and trucks with no history of major damage are even considered by manufacturers and their dealers for certification. The manufacturers have an inspection process of mechanical, as well as cosmetic, items that each vehicle must go through before obtaining certification. If necessary, repairs are made and scheduled maintenance performed. Once a vehicle is certified, it is covered by a warranty that extends beyond the original factory warranty.

The warranty typically includes some of the same features as a new-vehicle warranty. For instance, some warranties include roadside assistance for towing, fuel delivery if you run out and unlocking the vehicle if you lock yourself out.

Some plans pay for rental cars or expenses if your car breaks down on a trip.

In addition, some manufacturers allow a vehicle exchange or money-back guarantee after three days or 150 miles. Several offer special financing to qualified buyers, often at rates that are equal to rates charged on new-car loans, which are typically higher than rates on used-car loans.

A couple provide the buyer with third-party verification that the vehicle has not been in an accident or otherwise damaged.

The differences in the programs are in the details, and consumers need to beware of those differences. "'Certified' is an unregulated term," said Bill Bates, preowned marketing manager at BMW of North America. "There is no one standard to which certified used vehicles must adhere, nor is there any one watchdog group that ensures qualifications are met."

Mr. Bates says a savvy consumer, however, can test a program's merit by simply asking a few key questions. Their questions should include: What are the dealers' criteria for selecting and certifying a vehicle? What is covered under the warranty? How long is the warranty period? And is the warranty transferable? Who provides service if it is required?

Buyers should be aware that they pay more for a certified used car than a regular used car. "They pay more, but they get more by lowering the risk of buying a used car," said Mr. Bates. "In today's economic environment, anything that reduces a consumer's risk is a good thing. By its very nature, the purchase of a used car entails risk. Used-car certification programs are designed to reduce that risk, while providing consumers with greater peace of mind."

Now is a particularly good time to consider buying a used car, not only because of certified preowned programs, but also because of the flood of quality used cars available and low used-car prices. Record sales of new cars, combined with returned lease cars, have created a glut of used cars.

Also many owners trade in their cars early to take advantage of low-interest financing and/or hefty rebates, and rental companies are always selling off their fleets. This has depressed used-car prices.

Mannheim Auto Auctions of Atlanta, which holds auctions for dealers and manufacturers to buy and sell used vehicles, shows an overall drop in used-car prices of more than 4 percent from year-ago levels. "From the consumer's standpoint, both selection of used cars and prices are good," said Tom Webb, Mannheim's chief economist.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide