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Twice is nice: two times is the charm for certified pre-owned vehicles

Entrepreneur, Dec, 2003 by Jill Amadio

WANT TO STOCK YOUR BUSINESS with commercial vehicles and still conserve precious capital? Try factory certified pre-owned vehicles. Although this trend is relatively new, certified pre-owned vehicles (CPOs) are gaining popularity: According to J.D. Power and Associates, CPOs now account for 35 percent of late-model used vehicles sold.

By going the CPO route, you can afford better-equipped vehicles, since options you may not have been able to spring for on a new vehicle may already be on a CPO. If you're loyal to one brand, but the newest models aren't within your budget, a CPO from that manufacturer can bridge the gap.

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Inspected against a 100-point-plus checklist, CPOs are issued certificates by the original manufacturers and are sold through their dealers. Many are fresh off leases and in good condition. Some dealers sell CPOs with no down payment, low APR, a record of the vehicle's history and a limited warranty. Since the vehicles are sold with the full backing of the manufacturer, which checks them out with tests by its own mechanics, buyers have the dealer and the carmaker to approach in case of complaints. J.D. Power and Associates points out that a CPO can cost an average of $1,000 more than a comparable non-CPO used vehicle, but the benefits of certification can easily outweigh the slightly higher price.

Pre-certification testing covers the vehicle's power-train, engine performance, chassis, electronics and other systems, suspension, frame steering and brakes. Ford's 115-point inspection also checks air bags and seat belts, alarm, seats, head restraints, locks, tires, wheels, body panels and bumpers, as well as interior and exterior lights and mirrors. Ford offers a six-year/75,000-mile warranty, plus travel expenses up to $500 for up to three days in case of a breakdown, reimbursement for a rental car, and a full tank of gas on delivery. GM's and GMC's certification includes 24-hour roadside assistance; its vehicles, which are less than 6 years old with under 60,000 miles, are available to fleet customers through local dealers. GM also adds 3,000 miles or three months to the vehicles' existing warranties. Dodge vehicles undergo a 125-point inspection and are sold with an eight-year/8,000-mile powertrain warranty. Tips for buying a CPO:

* Make sure certification is through the factory, not just through the specific dealer so you can have the vehicle serviced at other dealerships.

* Find out whether the inspection checklist covers all the vehicle's major components.

* Look for a detailed inspection report; it should include details such as how much tread is left on the tires.

* Get a copy of its repair and maintenance history.

* Ask what's covered under the warranty and if the warranty is transferable should you decide to sell the vehicle.

* Determine if there's any time left on the original warranty.

* Ask if roadside assistance, rental car reimbursement and destination charges are included.

* Ask if the dealer will refund your registration, sales tax and license fees if you decide to return the vehicle.

Business Services Industry

Twice is nice: two times is the charm for certified pre-owned vehicles

Entrepreneur, Dec, 2003 by Jill Amadio

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