Certified Pre-Owned Vehicles

morgantia · October 2007

Thanks for your comments. That's why I asked.

I'm looking to pay 80-82%% of the asking price (about 25.5K on a 30.0K), but am wondering where to start negotiation, or is 20% below asking is even reasonable as a final offer. I just don't know what number to use as my starting point (hence, the 21K is at 30% off asking).

Is there a standard dealer markup for CPO vehicles?

I did post in the TMV forum asking for the current MDX auction prices in my area. I will work up from that.

The Edmunds retail for a CPO MDX is at 28.7K, non-CPO is 26.6K. I would like to pay under this price, of course.

Thanks!

suydam · October 2007

I think that may be too much off a CPO vehicle. Maybe you should try the non-CPO route and get the vehicle checked over yourself by a mechanic before you buy. There is much more negotiating room with non-CPO used cars. We bought a CPO Vibe in July and were able to get $1500 off, but that was all (now, percentage wise, that was a bit over 10% as Vibes are much cheaper than Acuras!). Vibes are hard to find, but this one had been sitting on the lot for awhile and they wanted it off their inventory. Sometimes those factors are hard to spot in advance.

british_rover · October 2007

Seriously not many dealers have a 20% markup in a regular used car let alone a CPO unit.

morgantia · October 2007

Thanks! That's what I'm trying to garner - what's the average markup on a used (CPO or not) vehicle sold through a new car dealer? I know it varies greatly, but is there a general difference in markups for used/CPO cars in the 20-25K range as opposed to those in the 26-32K range?

Various online articles mention markup ranges from 30 to 45% over the price of what the dealer cost was for the car, CPO or not (dealer's cost being price paid + cost to bring it to CPO standard + the CPO fee + like-new detailing).

That's where my offering 80% figure came from.

So, anyone buy a CPO MDX recently?

The new ones are really pretttty....but a new MDX will have to wait until we see how our income projections for the next 2-3 years play out...:)

Thanks again.

british_rover · October 2007

If someone were to offer me 9,000 dollars less then what I am asking for a car in the high 20s to low 30s I would thank them for coming into the dealership and wish them a nice day.

I wouldn't even acknowledge that offer with a counter offer. If the customer came back with a more reasonable offer I might counter it or I might just show them the door.

The most expensive used car on my lot is a little over 70,000 dollars and I don't have 9,000 dollars of markup in that car.

kzybulew · November 2007

Updated Info - Please advise:
As we're nearing the end of our lease, we've test driven quite a few vehicles but aren't finding anything that we love as much as our car (and everything seems expensive.)

The payoff quote from Audi Finance for our car is $26191.20, (without taxes, fee's etc.) Our dealer is saying that their CPO cost is 2260.00 (that seems high to me?) and that the CPO price including tax and title etc. (minus the $850 loyalty) is $30554.30
Should I try to negotiate that CPO price? Should I shop other Audi dealers?

He stated that the top tier financing rate for 25 - 60 months is 5.9%. When I got off the phone with him I went to audiusa.com and found a up to 60 month 4.9% promotion for 2005 allroads. When I called him back he said he'd speak to the business manager. Were they trying to make additional $ there or was that simply a mistake? (I'm so mistrustful of this whole process.)

I appreciate the assistance and sorry if there is pertinent information that I've left out.

kzybulew

chop629 · November 2007

The following answer came from www.carbuyingtips.com/lease. This is an EXCELLENT sourceand I use it all the time! Should you buy your leased car at the end of the lease or should you dump it?
Many people ask me if they should buy the car at the end of the lease. Usually the end of lease purchase price, known as "Residual Value" is $3k -$4k more than actual market value of the car. Smart shoppers know the buyout price is thousands over market value, and will turn in their leased cars to the leasing companies instead of buying. That caused used car values to tank unexpectedly in 2001-2003. Many people forget there is also a $300-$400 non-negotiable "purchase option fee" buried in your lease contract if you buy the car at the end of the lease.

Your strategy: I would wait until the end of your auto lease and ask the leasing company if they will sell the car for less. Offer less than market value for the car. Many leasing companies are arrogant and still play hardball. If you leased and took it on the chin going into your lease or if your gross cap cost was MSRP, don't give them one cent more. If they don't budge on the buyout price, exact your revenge on them by dumping another used car on them where they will lose $2000-$4000. Don't let them scare you with threats over mileage penalties, or non-matching tire fees, it still beats paying $4000 more for a car than the market value. They'll call you in advance to pressure you to buy the car at lease end. Research the value, dodge their calls, and show up at lease termination with a check in the amount you want to pay. Haggle smartly, telling them you know used cars are worth a lot less now. With no sale they have to dump the vehicle at auction. Don't pay them until they sign a buyer's order first! If they reject your offer, walk away, game over. Now they have no time to strategize, the deal is over and you pinned them against the wall. Maybe they'll chase after you before you drive out to give you the lower price, but if not, just keep on driving with a grin on your face.

kzybulew · November 2007

Updated Info - Please advise:
As we're nearing the end of our lease, we've test driven quite a few vehicles but aren't finding anything that we love as much as our car (and everything seems expensive.)

The payoff quote from Audi Finance for our car is $26191.20, (without taxes, fee's etc.) Our dealer is saying that their CPO cost is 2260.00 (that seems high to me?) and that the CPO price including tax and title etc. (minus the $850 loyalty) is $30554.30
Should I try to negotiate that CPO price? Should I shop other Audi dealers?

He stated that the top tier financing rate for 25 - 60 months is 5.9%. When I got off the phone with him I went to audiusa.com and found a up to 60 month 4.9% promotion for 2005 allroads. When I called him back he said he'd speak to the business manager. Were they trying to make additional $ there or was that simply a mistake? (I'm so mistrustful of this whole process.)

I appreciate the assistance and sorry if there is pertinent information that I've left out.

kzybulew

qbrozen · November 2007

post your vehicle over on the Real-World Trade-in Values board to find out what it is really worth.

isellhondas · November 2007

Sorry but this is bad information.

The residual value at the end of a lease shoul be close to the wholesale value of the car. I have no idea where you came up with your idea that the cars will be worth 3-4000.00 less than they are actually worth.

Now, in the past some car manufactures have done some dumb things on leases that have caused this to happen. they have set residuals artifically high in order to make the lease payments attractive. You could say they have mortaged tomorrow for today's sales. This, however, is uncommon and I would think lessons have been learned from this.

Lease residuals are NOT negotable! Where do you come up with this? You WILL pay the residual value you agreed to when you leased the car! You WILL pay for excess mileage or damage on the car!

This has nothing to do with arrogance or playing hardball. a lease is a contract and nothing more.

It's like you seem to think you can change the terms because you don't like them.

isellhondas · November 2007

There is a very good reason the CPO charge is that high.

Few cars cause as many problems as an aging Audi and the warranty companies are well aware of that.

Kind of like an 80 year old man who smokes two packs a day trying to buy life insurance.

You may be a lot better off just walking away from that lease.

qbrozen · November 2007

I'm pretty sure the reference was an old article. You are right, of course, leased vehicles these days, more often than not, have a pretty accurate residual.

isellhondas · November 2007

That is because some very painful and expensive lessons were learned!

joel0622 · November 2007

No kidding, it took us a long time to recover from the days when you could lease a fully loaded Expedition for $325 a month with $0 down. The hardest part was not so much getting over Ford soaking those units up when they came back in, but explaining to the customer why to go into a like unit when there lease was up would now be $550 a month.

Even the folks who could afford the $550 had a hard time swallowing that pill because they had gotten used to paying that $325. Between that and the undisclosed lease contract allot of the import stores were using(at least in our area) pretty much killed our leasing program for a number of years, and has really never been the same.

joel0622 · April 2008

Starting today you can CPO a used car up to 6 years old (used to be 5) and with up to 80K miles (used to be 50K). The warranty is now Power Train to 100K (used to be 75K on most) and the first 3 months or 3000 miles is Comprehensive, AKA Premium Care (used to have no Comprehensive) The new inspection is now 165 point instead of the old 115.

It will be a great program once we get it going.

bostonfan · April 2008

I just bought a CPO Explorer on Friday under the old 6yr/75k plan. Any way to get the dealer to up the warranty to the new offering of 100k, or am I out of luck?

volvomax · April 2008

You are SOL.

bostonfan · April 2008

Kinda figured!

volvomax · April 2008

Yeah,
In the first place,it isn't the dealers call. it's the motor companies.
Once the car is sold, the terms of the sale, warranty,etc is unalterable.

The reason Ford changed the coverage is to sell more cars now.

58motor · May 2008

Can you only get a certified used honda at a honda dealership? Is it a bad idea to get an odyssey at a non-honda dealership?

Thanks in advance for your thoughts.

volvomax · May 2008

You can only get a Cerified anything at the manufacturers dealership.
so, a Certified Honda only comes from a Honda dealer.

The idea of offering certified used cars is so the buyer has the peace of mind in knowing that the car was fully reconditioned and backed by both the dealer AND manufacturer.

It is better to geta CPO car, if you can.
Especially if you plan to keep it for a prolonged period of time.
CPO cars generally cost more, but they come w/a comprehensive warranty and there is usually some special financing available.

58motor · May 2008

We do want this car for a long time and I will stop looking at odysseys at the other dealers.

prithis · May 2008

I have scoured the forums for someone who has been in the same situation as me, but could not find a single similar post.

In mid 2004 I purchased a 2003 Certified Used Toyota Corolla LE from a major Toyota dealership with 7,000 miles on it. Before the purchase I checked the Carfax report, which turned out to be clean. There was only one prior owner, and there was no mention of any accident. The salesman mentioned that this car had "just come in". I bought the car after test driving it and doing my due dilligence. The car was great, and I have been maintaining it properly ever since the purchase at the same dealership.

A few months back, when I took in the car to the same dealership for the 35,000 mile scheduled maintenance, I mentioned to the service agent that the left headlight flickers ocassionally while I drive on a plain road. I asked him to check for anything loose in the headlamp.

While I was waiting in the waiting area, the service agent came up to me with an estimate for the service. He asked me a question which completely caught me by surprise. He asked me if the car was involved in an accident. When I truthfully denied that he said that the car had signs of being in an accident. He said that the front bumper had been re-painted and re-installed on the car, and the headlamp assembly had signs of damage. When I refused to believe him, he ended up taking me to the shop floor where the car was raised up. An engineer showed me where the headlamp assembly had some damage.

I was flabbergasted. I mentioned to them that I had bought the car from their dealership as a certified used vehicle, the car was supposed to be accident-free, have a clean history when I bought it, and I certainly have not damaged the car myself. They just shrugged, saying that it is now too late - several years have passed now before I brought this up with them, and for all that they knew I could have caused the damage myself.

The car should have been checked thoroughly as part of their certified program, and I cannot believe that the damaged light and repainted bumper was not seen by them. Could it be that the previous owner had damaged the car, took it to a roadside garage to have the bumper fixed and repainted, and avoided any report on Carfax?

I would like to know now if I have any recourse at all. Should I now check the Carfax report to see if anything was reported immediately after I purchased the vehicle? I have all the purchase documentation for the car. The problem is that I had bought the car in August 2004, and now it is 2009. But I noticed the problem with the headlight just in 2009, since it started flickering. Do I have anything to try other than just accept my fate?

By the way - the damage to the headlight is not evident from the front. Once the car is raised, you can see the damage by poking your head behind the headlight assembly.

qbrozen · May 2008

I would check carfax again if you are planning on reselling it, but other than that, there is nothing you can do, in my opinion, nor should you worry about it very much. It is what it is. Many many accidents slip through the carfax cracks.

Then again, if it DOES show up on carfax as happening prior to your purchase, MAYBE you have a leg to stand on. However, being it was so long ago, how do you prove they didn't tell you about the accident? I'm not sure if Toyota's CPO program doesn't allow cars that have had minor damage. That may be something to inquire about.

volvomax · May 2008

Honestly, a bumper that was re-painted is hardly catastrophic.
Certified cars are not guaranteed to be free from ANY bodywork, only MAJOR bodywork.
Toyota's are actually easy to check because they put VIN stickers on all the OEM bodypanels.
If those stickers are missing, then you have had major work done.

I'd just relax and enjoy your truck.

nameless · June 2008

I hope this question hasn't been asked already, but I'm new at buying a used car (have generally purchased new cars), and needed some advice.

I am in the market for a used Acura MDX, 2004/2005. This will serve as a primary car for the next year, but will eventually be a second car. I have been searching around and came across a 2005 with 56K miles, Touring, and Navi for $19,500 (non-CPO). However, the lowest CPO that I found is around $24K-$25K. You will probably know my question, but is it worth the extra $5K-$6K for a CPO, or should I just save the money and just go with a used?

This might also be a stupid question, but if I buy a non-CPO from a dealer/private seller, can I take it to a Acura dealer to have it inspected and get it CPO?

Thanks for the help!

volvomax · June 2008

First question, do the CPO cars have the same miles?

Next, you can't generally have a dealer certify a car the dealer didn't buy.
You may be able to buy a warranty for it though.

ny14337 · October 2008

I purchased a CPO 2001 Lexus RX300 a number of years ago for my wife. At the time I purchased it, I ran a Carfax check which came back clean and the dealer told me the vehicle had never been in an accident. Today I went to another dealer to purchase a new car. I was using the RX300 as a trade in. Imagine my shock when I was told that the vehicle had obviously been damaged at some point because there was a significant amount of repainting on the entire body. They offered me about 1/2 of what the retail value of the car is because their policy is that they don't sell cars that were in accidents so there is no resale potential for them. When I told them that it was a CPO vehicle from a Lexus dealership, they were shocked that it had been certified.

When I got home, I called Lexus customer service to find out how a vehicle that had obviously had some significant body work done on it could have passed their certification process. They told me that a vehicle could be certified as long as there was no frame damage. I have to admit that I was stunned. Their own website says that they will often not certify a vehicle if it has a strange odor, and now they tell me that as long as there is no frame damage its ok. Lord knows if there is frame damage. I didnt know there was anything wrong with the car before today.

Now I'm stuck with a vehicle that may be worth only half of what I originally thought. I wish I would have known this 6 months ago before my in-laws purchased a 2008 RX-400 and a 2008 ES-350 for cash. Any ideas on what recourses I have?

Thanks!

dtownfb · October 2008

About the only recourse you may have is with CarFax. they advertise some sort of guarantee that may be worth investigating. Other than this, I don't think you have any recourse.

ny14337 · October 2008

I'm not even sure if I could pursue anything through CarFax. I'm guessing that whoever the prior owner was decided to do the repair without going through the insurance company. Plus I think the CarFax guarantee is more related to issues such as total loss accidents, fire/flood damage, mileage issues, lemon law problems, etc... But thanks anyway. Now I need to bring it in to an independent bodyshop to see if there is any other problems with it.

millikin54 · October 2008

Your best course of action might just be to trade it in or sell it to another Lexus dealer. My wife and I had a similar surprise when I tried to sell her old car to an independent used car dealer. It was a 1 year-old used Ford Escort hatchback that her parents bought her from a Ford dealership while she was in college. After we moved and got new insurance on the car, the insurance lady mentioned something about her car having been previously totaled (this was before Carfax was prevalent).

I tried to sell it to an independent dealer, thinking that would be the easiest way to get a decent deal on the vehicle. The guy on the lot pointed out signs of repair from what looked to have been a significant accident. He told me that he couldn't buy the car because of the liability he might have to absorb at some point, and he couldn't afford that as a small independent shop. He then suggested for me to take it to a Ford dealer, saying that they would be big enough to not share his liability concerns.

So I took the car to a Ford dealership and asked them what they would give me for it. I didn't mention anything about the repair work that the other guy showed me. I felt it was fair since the dealer that sold the vehicle to my father-in-law never mentioned anything about it either. Fair dealership trade-in pricing for that car in good shape was around $4,200-4,800 at the time. They looked over the car for a few minutes and offered me around $4,500.

Since it sounds as though you are in a similar predicament, I would recommend that you do something similar. I'd be sure to play up the part about how you purchased it CPO. That way, I would think, they should give you a pretty fair deal.

dtownfb · October 2008

The only problem is the accident is showing up on Carfax. I guarantee they will check Carfax (or whatever database dealers use) before taking a trade in this environment.

volvomax · October 2008

Lexus isn't alone w/ this provision.
Remember that CPO warranties cover the mechanical aspects of the car, not the cosmetic.
Some dealers won't certify a car with obvious paintwork, others will.

ny14337 · October 2008

Well it seems that I have sort of gotten to the bottom of what the issue was. I spoke to someone from Lexus Customer Service who asked that I bring the vehicle in to one of their service centers so they could take a look at it. I agreed but before I did that I decided to go back to the dealer who told me that repairs had been done on my car. I asked them to show me what they had noticed. I was told that when they appraise a vehicle, they use some sort of device that measures the thickness of paint on the body. When they used it on my car, the thickness of the paint on all of the doors was more than double of what it should be. This meant to them that the vehicle had some type of work done it. After thinking about it, I believe what happend was that the vehicle was not in an accident. When I initially looked at the vehicle 4 years ago, there were some scratches, chips, etc... on the doors. I mentioned that to the salesman and he said that they could all be buffed out and compounded out by their detailing guys. What happend in actuality is that they probably brought it to a body shop and laid another coat of paint on all the doors. It looked great, you couldnt see a mark on it and my wife was happy. I explained this to the dealer I was trying to trade the car into and he said that while that it was a likely explanation as to why there was all the extra paint, it still did not change his valuation of the car. He said that especially in luxury cars, which he places the Lexus in, any type of repair to the body, even simply repainting the door, will devalue the vehicle. Even if that were true, I'm still not sure why it would decrease the wholesale value by almost half. They use Galves in NY and the wholesale value of my vehicle should be approx. $11,500. Dealerships in my area are selling cars with similar mileage and options for anywhere from $15,500 to $16,250. The dealership I wanted to trade it into offered me $6,500. Thats almost a $10,000 swing. I guess I'll be selling it on my own.

volvomax · October 2008

The dealer is correct that paintwork on a lux car will devalue that car.
However, it is an 01 and the devaluing shouldn't be that much. A competent dealer can tell if the work was just cosmetic or structural.

As for what dealers are ASKING for similar cars, asking isn't getting.
Unless you have seen actual buyers orders, you don't know what dealers are getting for similar cars. The tendency when selling used cars is to ask the moon for them, it allows for big discount to impress the buyers.

The big lesson learned here is, if you buy a used car with some chips or scratches LET THEM BE. You didn't buy a new car, you saved money and went used. Used cars aren't perfect, they are used. Painting a car is NEVER a good idea.

KShi86 · December 2008

I recently bought a used car at honda dealership. Upon leaving, when the sales person handed me the keys, I remembered, they're supposed to give me 2 instead of one, so I asked him for the other one he said he couldn't find the other one right now, but if i come back on saturday, he should have it for me...

um, and then i just looked at the driver manual today and it said im suppoed to have recieve a key code tag along with the keys (and i didn't get it that day either) the manual specifically said i would require the tag in order to get a copy of another key in case if i lose it in the future...

uhh, my question is, since this is a used (second hand car). When I ask the dealer for those key code tag, would they make an excuse about the previous driver didn't give them one? and then they try to charge me for new key code tag??

Do do you guys think/.?? im so cluless

qbrozen · December 2008

Its a used car. Its got what its got.
You can ask for things, but they are under no obligation to provide them.

jipster · December 2008

Come back on Saturday??? Sounds like good customer service... not.

He promised the extra set, so they are owed to you. You should have gotten it in writing before you left. Stay on them until they find or make you another set.

I would think the dealership would be able to pull the numbers from the vin # if no key code tag.

KShi86 · December 2008

hey thanks for your replies.

well, is there anything else i can do? i mean, what if they refuse or something?
or they try to make me pay for the extra set?

some friends told me said i should ask to speak to the manager if they give me a hard time?

oh, does anyone know the rules of selling a certified used car? like, if they are required to give out 2 sets of keys instead of 1? some sort of law to protect the buyer?

oldfarmer50 · December 2008

"...is there anything else i can do?..."

Go back on Saturday and ask for the key and the tag. If they don't give you what they promised, pull your car up so close to the front door that it prevents any customers from getting in or out of the building. Then take a cab home.

When they call in a panic demanding that you move your car tell them they can move it with the new key they promised, otherwise you'll come back NEXT Saturday to move it for them, maybe.

volvomax · December 2008

If they don't give you what they promised, pull your car up so close to the front door that it prevents any customers from getting in or out of the building. Then take a cab home.

Yup, great idea. I'd just call the Fire Dept and have the guy cited and his car towed.
Why does everything have to be confrontational??

volvomax · December 2008

Rule #1 is to always get everything in writing.

It may be that they really don't have another key for the car and may not be interested in cutting you one.
You can scream and holler all you like, but if they really want to be a-holes, you are SOL.
However, most likely they will cut you a new key and you can go on your merry way.
As for CPO, most CPO programs stipulate 2 keys. I don't know about Honda's.
Of course, you would have had to buy your car as a CPO car to qualify.

jipster · December 2008

Why does everything have to be confrontational??

Just a guess... but I believe the old farmer was just joking. I believe the emotorcon, "

" conveys this quite cleanly. Besides, one saves the parking in front of the dealership door trick for more serious matters... like running out of coffee creamer.

isellhondas · December 2008

You really don't need that tag. Most people throw them away.

It just makes it a bit easier to duplicate a key, that's all.

On trade in's quite often we don't get extra keys or owner's manuals. You get what we get unless arrangements are made at the time of the sale.

Karen_S · February 2009

A reporter would like to speak to someone who has recently bought a certified pre-owned vehicle after an extensive amount of research. Please respond by Friday, February 20, 2009 to jfallon@edmunds.com with your daytime contact info and a few words about your choice.

tencom · December 2009

When a dealer "certifies" a pre-owned vehicle. Should we expect a formal documentation acknowledging the Warranty of the vehicle up to a certain mileage, say 100,000. Should the documentation also include the details of what's covered and what's not?
I'm concerned that even if the car is certified, I might have problems with filing claims should problems arise in the future. Thanks in advance for your feedback.

chop629 · December 2009

First let me direct you to www.carbuyingtips.com. I am not affiliated with the site in any way, but whenever I am about to buy a car, I re-read everything, it's a great resource.

Yes - when a dealer "certifies" a pre owned vehicle, 1) it should be written on your Sales Agreement, in addition to make/model and year, it should also be written that the car is CPO (Certified Pre-Owned). This means the dealership went thru anywhere from 120 to 161 points of inspection before certifying the car. 2) Most dealerships should have prepared brochures re: their CPO coverage. For example most things like wear and tear are NOT covered, (tires, brakes, oil changes) but engine repairs are. A dealers website will can give you what specifically their CPO coverage includes, mileage etc.

jshereed · November 2010

I am in the market for a car. I have been looking at the BMW 528i RWD. I found one I like with extremely low milage. While talking to the woman in finance she told me that I would have to put down a 10% downpayment because the last time I had a car note was so long ago that BMWFS considers me a 1st time buyer. She also shared with me thatno matter where I go or what I buy any finance company will require a 10% downpayment. Is this true?

Please advise

Thanks!

oldfarmer50 · November 2010

How long ago did you have your last car loan? I went 22 years between car loans and got 100% financing just for the asking. My credit score was about 800 out of possible 850. How's your credit? Any black marks?

They sound like they're being a little snotty. Why not tell them you'll meet them half way--you'll put down 10% if they drop the price 10%.

qbrozen · November 2010

Simple fact is: a lender will lend you what the car is worth. That way, they are covered in case you default. My gut says the car is overpriced and that is why you have to put down 10% (to cover the hole you will be in and protect the lender).

Depends on the lender how far they will go. Some use KBB, some use NADA, some use a crystal ball. I can say that, on my past 3 cars, my credit union has told me up front what they feel the car is worth and I've been buying them from dealers for far less than that.

Certified Pre-Owned Vehicles

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