Car shopping. Love it or hate it, it’s a necessary fact of life. It can cause your emotions to run the gamut – excitement, anticipation, hesitation, fear, anger, happiness, and eventually, relief once the buying process is complete.
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Generally speaking, car dealerships have long fought the stereotype of being sneaky, underhanded scam factories. Everyone has heard the horror stories about the infamous plaid jacketed, slicked back salesman who sold the ultimate lemon to an unsuspecting buyer. As a result, programs, incentives, policies, and laws have been developed and passed in an effort to protect the consumer.
To further alleviate some of the headaches that are common to the buying process, services like Certified Pre Owned (CPO) and vehicle background checks have been initiated by automobile manufacturers and independent reporting services. These highly promoted programs are intended to help educate the consumer about the vehicle they’re interested in.
Independent reporting services such as CARFAX or Experian Automotive Services provide information about a vehicle’s ownership and insurance history and can often identify problems that might not otherwise be obvious – odometer tampering, salvage titles, flood damage, and occasionally even major accident damage. Often, these services can supply additional information that might be helpful to a potential buyer as well.
CPO programs are typically factory-initiated services, wherein a dealership follows an inspection procedure to identify, fix, repair and/or disclose problems with a previously owned vehicle, prior to offering the vehicle for sale. Additional CPO benefits may include an enhanced or extended warranty, roadside assistance, “loaner” vehicle assistance (in the event of vehicle repair), and so on.
Of course, these benefits extend beyond the consumer and to the dealer and manufacturer as well – dealerships are able to more easily sell used vehicles under the CPO program, as it alleviates some of the concern that a consumer might have about buying “a used car.”
Recently, there’s been a massive commercial pitch to promote and educate people of the benefits of a CPO program – “Buy the car you didn’t think you could afford” or “Enjoy piece of mind” are some of the underlying messages in these marketing campaigns. The manufacturer wants the consumer to understand that buying a CPO vehicle should be painless and quite possibly “prestigious.”
Sounds great, right? Heck, we should all run out and buy a CPO vehicle – we’d save thousands of dollars, enjoy complete piece of mind, and never have to worry again.
For the most part, CPO programs do appear to work as intended. But there are some potential problems and pitfalls that the consumer needs to be made aware of – the adage “Let the buyer beware” still applies to CPO vehicles. Roadfly has learned of several recent CPO problems and feels compelled to share some of this info with you, our valued reader.
The Basics: What Exactly is CPO?
Rather than bore you with paragraph after paragraph of information, let’s just consider the basics about most CPO programs.
* Factory initiated program
* Applies to vehicles that are relatively new and still covered by original warranty
* May extend vehicle’s warranty by time and mileage
* May include extra services like roadside assistance
* Vehicles are inspected by the selling dealership: a comprehensive list of body, mechanical, safety and accessory inspections is performed
* Vehicles are repaired and brought up to standard prior to sale
* Vehicles usually receive additional detailing
* Vehicles are usually “featured” by the dealership
* Vehicles usually cost more than non-CPO vehicles with similar options and equipment
The above list is just what it is – the very general basics. There’s a ton of fine print involved with each manufacturer’s CPO program, so you’ll have to do your homework if you’re interested in a CPO vehicle. But what happens if things go wrong? Does buying a CPO vehicle guarantee you’ll get a trouble free vehicle? Not exactly.
While browsing the various internet-based message boards, we discovered that a small (yet not insignificant) number of people were reporting odd problems with their CPO vehicles – some had an inordinate number of problems, others had minor problems, but they were problems nonetheless.
After doing a little more digging, we found one CPO vehicle owner who was sold a car that appeared to have been the victim of a major accident – body panels had been replaced and repainted, air bag problems existed, and so on. Another CPO vehicle owner had reported that his “new” CPO vehicle was in the shop for months on end, while the dealer attempted to fix a long list of problems. And yet another owner reported a constant overheating problem, combined with oil leaks.
We attempted to contact the owners so that we could discuss this with them, but apparently, the manufacturers who sponsor the CPO program had put a “gag order” on the owners. E-mails were returned with a brief note indicating something to the effect of, “Can’t talk about it, [vehicle manufacturer] has made me sign a non-disclosure agreement.”
Sure enough, all talk about the problems on the message boards stopped soon after we attempted to contact the owners. The manufacturers had successfully swept the issue under the rug; we can only speculate as to what has happened with the vehicles. Several of the people who were having problems with their recent CPO purchased vehicles appear to have new replacements. Calls to the respective manufacturers were not returned, so we can’t confirm the exact outcome of these events.
Rest assured that these incidents are not typical, and are probably the result of a few rogue dealerships. After all, a manufacturer would not want to develop a reputation of certifying anything and everything that sat on the lot – that would negate any benefit of a CPO program.
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But, the problems present another question – if damaged vehicles can be inspected, certified and sold as CPO vehicles, why isn’t a service like CARFAX or Experian catching some of these problems? That’s what they’re is supposed to do, right?
Again, the answer is “not exactly.” The vehicle history services appear to only catch problems that have a direct impact on the title and/or “history” of the vehicle. Transactions such as ownership transfer, or a change in status (i.e., Salvaged title) are the major components of a report. In theory, a vehicle could have tens of thousands of dollars of damage from an accident, and so long as the vehicle wasn’t “totaled” by the insurance company, the reporting services might not be able to pick-up on the damage.
Ultimately, buying a vehicle is still a somewhat risky business, even though the vehicle may be “Certified Pre Owned.” An inexperienced technician may have missed a few inspection points, or a dealership might be desperate to move a vehicle off the lot quickly, and a seemingly perfect CPO vehicle might turn into a real nightmare.
We strongly suggest that a prospective buyer take the following actions when considering the purchase of a used vehicle, even if it is a Certified Pre Owned vehicle:
* Drive the vehicle not as a buyer, but as an inspector. Pay attention to any rattles, squeaks, odd noises, or problem indicators. A vehicle should not pull or drift to one side or another, nor should it smoke, smell odd or exhibit any other unusual characteristics. If you’re uncertain as to what’s normal, ask to drive a similar vehicle for comparison.
* Carefully inspect the vehicle for proper equipment. We’ve heard dozens of stories about CPO vehicles not having the correct spare tire included with the vehicle, or components like CD changers and tool kits missing. Spare tires should be in good condition, properly inflated, and the proper size and style for the vehicle.
* Take the vehicle to an independent shop and ask them to inspect it for you. A thorough inspection should cost between $100 and $200, and is money well spent. If possible, ask the shop to conduct a service history check for you – it will give you an idea if the car has been spending a lot of time in the service department.
* If you suspect the vehicle might have been in an accident, take it to a quality body shop and have them check the paint thickness. Often, cars that have been repainted will have a thicker layer of paint than what the factory would apply. Factory paint thickness on most modern BMW vehicles is between 4-7 “mils.”
* Get a vehicle history report on the vehicle. While it won’t tell you everything about the car, it is helpful.
* Ask the selling dealership for copies of the CPO paperwork, including inspection and service records. A reputable dealer will not be afraid to share this information with you. We’ve heard stories of some dealerships claiming that the service information is “confidential,” which isn’t exactly true. If the dealership wavers on this, consider walking away, as the history is most likely not favorable.
* Compare the CPO vehicle to a non-CPO vehicle with similar options. Ask yourself if the additional price for the CPO vehicle warrants the purchase. Many times, a consumer can purchase an aftermarket warranty that would cover most repairs for less than the additional cost of the CPO vehicle. It’s an option to consider.
Buying a car can be a very rewarding experience, and it can be a very disappointing experience. When car shopping, take your time – don’t be in a rush to buy, and most importantly, don’t “fall in love” with a certain vehicle. Car manufacturers build thousands of vehicles each month, and you can be assured that there are plenty to choose from. If anything about a particular vehicle causes you to raise an eyebrow, be prepared to walk away and consider another vehicle, regardless of whether it’s a CPO vehicle or not.
If you’d like to learn more about CPO vehicles and owner experiences, visit our message boards and use the search feature to find information and discussion about other people’s “CPO” experiences.