Top 10 Certified Pre-Owned Vehicles
Today's economy presents some enticing alternatives to buying new.
When it comes time to buy a car, consumers basically have two choices: new or used. Buying new will cost you, but you'll get all the latest bells and whistles, a comprehensive manufacturer warranty and the peace of mind that you're not purchasing a vehicle that has been put through the wringer. Go the used route, and you typically get more for your money. However, you never know if you'll get a peach or a lemon — or do you?
There's a relatively new type of used car on the market that offers the advantages of buying both new and used. That is, you get more for every dollar spent, as well as the solace of knowing that the vehicle's health and well-being is guaranteed by the vehicle's manufacturer or an independent agency. It goes by many names, but is most commonly known as certified pre-owned (CPO).
To qualify as CPO, a vehicle must be inspected, refurbished to "almost new" condition and certified as such by the vehicle's manufacturer or an independent certifying authority. This helps to almost eliminate the chance of a consumer getting a lemon. Furthermore, CPOs typically come with some type of factory-backed warranty and financing, just like a new car.
There are variations regarding what is termed certified pre-owned, however, so it's important to note the distinctions. Manufacturer (or "factory") CPO vehicles are sold only at authorized dealers. The cars are generally five years old or newer and have fewer than 80,000 miles, and they often cost more than vehicles certified by independent authorities. Independently certified CPOs can represent good value, especially since independent authorities may hold a vehicle to a higher standard than a manufacturer. Independents include brands such as the National Vehicle Certification Program, CarMark and others. Finally, there are dealer-certified vehicles. These generally have not been inspected by anyone outside the dealership, but do typically carry a warranty or extended service contract to provide some protection to the consumer.
While we aren't fans of the dealer-CPO vehicle programs, we do think the others, in general, take much of the worry out of buying used, and the value proposition of CPO cars has garnered consumer interest in this tough economy.
"Across almost every major [manufacturer], new car behaviors have trended downward, used has gone downward and, for the most part, CPO has trended up," says Steve Gallagher, marketing manager for Toyota's CPO program. Gallagher also notes that May was Toyota's best-ever CPO sales month and that the company is on track for its best CPO year ever.
Be careful, though. CPO certification adds, on average, $1,300 to the price of a used car, and it can go as high as $2,000. In today's strong used-car market, that can bring the price of a CPO car close to the price of a new car, and that's before manufacturer incentives. Many manufacturers offer more favorable financing rates, though, so buyers can save money that way.
Take a look at the 10 best-selling CPO vehicles through the first six months of 2010. We examine what makes them hot sellers and talk about the strengths and weaknesses of each.
Sales numbers are up to date through June 2010. Data provided by the individual manufacturers and compiled by MSN.
10. Lexus RX
Roughly half of all luxury cars are leased, so it is important for the manufacturers to have effective CPO programs to keep the sales flowing once the cars come off lease. One of the hottest CPO vehicles is the Lexus RX. Though it's a highly desirable crossover as a new vehicle, premium pricing puts it out of reach for many consumers. A lightly used CPO version is the next best thing. However, CPO prices aren't that low, as the RX's residual value is among the best in the industry. RX buyers get a vehicle with easy ingress/egress, a luxurious interior, plenty of room for five, useful cargo space and a glass-smooth ride. They can also go green by opting for a hybrid.
Minivans are the ultimate in practical transportation. They offer room for up to eight people, and all passengers can get to their seats easily thanks to sliding side doors and thoughtful seat arrangements. But minivans can also be expensive, especially if they are loaded with the entertainment features families desire. The Honda Odyssey is no exception, with starting prices as high as $40,000 for a brand-new, loaded EX-L. But it's a roomy, comfortable minivan that handles well. The Odyssey also gets a powerful engine, useful interior storage and the benefits of Honda's reputation for reliability and high resale values.
8. BMW 5-Series
Luxury automakers tend to put more backing into their CPO programs, hoping to turn CPO buyers into new-car buyers. BMW's CPO program adds a 2-year/50,000-mile warranty at the end of the original 4-year/50,000-mile warranty, and includes two years of BMW Roadside Assistance, a comprehensive inspection and a CarFax vehicle history report. The BMW 5-Series' mix of usable space and on-road dynamics makes it tempting for families who want precision German engineering. It is the most fun-to-drive car of its size, and the BMW roundel badge is a desired status symbol.
The Mercedes-Benz E-Class is a model of luxury and sophistication. Though it isn't Mercedes' most affordable car, it's the company's best CPO seller. "We like to say the E-Class is the heart and soul of the Mercedes brand," says Rob Moran, manager of product and technology public relations for Mercedes-Benz USA. "It really does offer a compelling balance of quality, value, safety and exclusivity." The Mercedes CPO program consists of a 162-point inspection (including a road test), a 12-month extension on the original factory warranty and roadside assistance for the life of the vehicle. Customers can also extend their warranties by 12 or 24 months, but the warranty can never exceed seven years or 100,000 miles.
Must-See on MSN
Surprised not to see any Kia or Hyundai Certified vehicles on this list. They are only the highest rated Asian Imports by JD Power and Associates (YES, higher than past favorites, Honda, Toyota, Mazda, Nissan,etc.), less expensive, and have the longest/best warranty. OH!!! I forgot...they also have the Best Performance/most horsepower AND Best MPG!
There really is no such animal as an American made car anymore. The parts come from all over the world. Not to mention many foreign cars are now made here in America by American workers.
I bought a 1977 Dodge b200 tradesmen new, i had a few scratches on it, I looked at the door lable for color code and found out my USA van was made in Canada? Isn't anything made here
anymore? What happened to import taxes to keep AMERICANS WORKING????????????????????