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Certified Pre-Owned (CPO) Name Game

Major manufacturers advertise the benefits of buying one of their certified pre-owned (CPO) vehicles, touting no-accidents, well-maintained, recently serviced, low-mileage, 120 plus point check lists and professional national TV or radio and print ads instilling a high level of consumer confidence.

Unscrupulous used vehicle dealers advertise “certified” vehicles giving a false impression that these are like the manufacturer’s CPO vehicles, when they are not.  Only an authorized new car dealer can truly “certify” a used vehicle of the same brand and provide the important extended warranty of the manufacturer.  This is substantially different than the self-certified vehicles of other dealers that may have no extended warranty or perhaps inferior or useless warranty of an after-market company not backed by the manufacturer.

So many consumers are misled by the name game played by dealers in advertising or representing their used vehicles as Certified, when in fact such cars or trucks are not true CPO vehicles.

Regardless of the origin of the used vehicle or whether or not it is a true CPO, buyers are urged to get an independent pre-purchase inspection (PPI) by a licensed mechanic or another dealer before buying any used car as even a real CPO cannot be trusted.  All too many times dealer’s staff quickly check off the long-pre-printed list without really checking all items (i.e., no dealers or staff can fully be trusted).  I have personally found CPOs delivered with worn tires and or brakes that should not have passed safety inspection, low fluids, reset or altered warning lights and other defects that revealed the CPO inspection was bogus.  Then when consumers call manufacturers to complain they are given no meaningful assistance and often told there is no control over independently owned franchisees.  That is nonsense, since manufacturers can sanction their dealers, and if bad enough acts, seek to terminate or not renew the franchise, thus putting the bad dealer out of business.

There are numerous local, state and federal advertising regulations, requirements and prohibitions.  One good example is found in the New York NASSAU COUNTY ADMINISTRATION CODE UNFAIR TRADE PRACTICES LAW, Section 21-10.2 (5) (B) which in relevant part prohibits the use of the term “Certified” in connection with the sale or lease of used cars, unless the manufacturer has an established inspection program for pre-owned vehicles backed by the manufacturer’s warranty and the vehicle to which such term is applied has passed such an inspection according to the manufacturer’s standard.

Like everything else, CAVEAT EMPTOR, Buyer Beware, and don’t be fooled by the chronic misleading use of the term certified used or pre-owned cars, trucks or vehicles.  Too often buyers think they are getting a real CPO when they are not, so be sure to have it clearly printed on the Sales Order, Retain Installment Sales Contract (RISC), etc. and be sure the terms of extended warranty (e.g., extra two years and unlimited or specified mileage or the like) be stated in the purchase documents, along with stating it is a manufacturer’s warranty and not after market.

Beware of the after-sales finance and insurance (F&I) staff that may also play the name game and switch you into an inferior after-market warranty despite the new dealer advertising this is a CPO.  I have personally witnessed those deceptive practices employed at even luxury brand dealerships.

It is a good idea not to go car shopping alone, especially if an inexperienced or timid buyer, but rather bring someone with you who knows all of these dealer tricks to protect you.  Also, do not sign anything unless you read it, understand it and the terms as written are the same as orally promised.  Under federal law known as The Truth In Lending Act (TILA), you are entitled to keep a copy of the RISC even without signing so you can comparatively shop for financing or leasing and have the documents reviewed by others.  These are complex documents that must be taken seriously and don’t be pushed around and coerced to sign.  Especially avoid signing any electronic documents but rather insist on a written copy to review and keep in advance.

Further, beware of “the five-finger fold” where dealers quickly fold up the purchase and finance documents and put them in a folder, so the consumer does not read them or notice alterations or different terms than what was discussed.

Consumer Tips & Advice