CPO Doesn't Mean What You Think - The Podcast

"SteveLehto" (stevelehto)
08/25/2016 at 10:10 • Filed to: None

Consumers are confused by the used car market. Not just with “as is” sales, but now with “Certified Pre-Owned” cars. People buy them and then are surprised when they wonk out. “What? The Lemon Law doesn’t cover CPO cars?” No, no it doesn’t.

“Certified Pre Owned” is probably the greatest marketing stratery to sell goods in America since “light” beer. Tastes great and less filling! Whee! Wait. Is it better for you, or does it just take up less volume? Didn’t my previous beer taste great? Why are millions of people chanting this at baseball games?

So, people buy CPO cars and are hypnotized by the “175 - Point Checklist” that the car was EXHAUSTIVELY tested against. And now it is a CPO car. Which means . . . . That it is a used car, probably being sold by the dealer “as is” and it has a manufacturer’s warranty. That particular warranty might be longer than it would be otherwise, but it gives you no (zero) extra legal rights with respect to the Lemon Law.

So, your CPO car blows up as you drive it off the lot, or the mechanic points out that it was bent in half and then straightened? Good luck with that. A wise attorney once said you should always inspect any used car you are buying. And no, you cannot count on the seller’s inspection. Even if they do “certify” it for its CPO status.

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DISCUSSION (26)

shop-teacher > SteveLehto
08/25/2016 at 10:21

Fact: The two most unreliable vehicles I’ve ever owned, were the two Certified Pro-Owned vehicles I’ve ever purchased.

Chasaboo > SteveLehto
08/25/2016 at 10:26

CPO is just packaging.

DipodomysDeserti > SteveLehto
08/25/2016 at 10:31

Arizona actually has a Lemon Law when it comes to used cars. It’s only 15 days/500 miles, though.

SteveLehto > DipodomysDeserti
08/25/2016 at 10:33

Which I would assume is not affected at all by a “CPO” status?

DipodomysDeserti > Chasaboo
08/25/2016 at 10:35

Not quite. I’ve owned several CPO BMWs and received quite a bit of free repairs and maintenance on both of them. BMW used to have a program (not sure if they still do) where if you get the remainder of the original owner’s free maintenance if you own a CPO car. I got free pads and rotors on all four corners at 49,500 miles on my wife’s car (the free maintenance ends at 50k miles) plus a couple of oil changes (normally not a big deal, but her 335d took something like 8 quarts of oil). That was nice. I also had close to $10k in warrantied repairs done on that car outside of the factory warranty.

Future next gen S2000 owner > SteveLehto
08/25/2016 at 10:37

Lemon law only covers new cars, correct?

SteveLehto > Future next gen S2000 owner
08/25/2016 at 10:38

In most states, yes.

Urambo Tauro > SteveLehto
08/25/2016 at 10:39

And if anyone’s still confused as to what “as is” means :

random001 > SteveLehto
08/25/2016 at 10:39

I recently bought a CPO Hyundai, but there was a good reason. IT kept the 10/100k factory warranty in place, instead of replacing it with a 5/60k warranty, and the price was.....not different than the same car at the non-factory used car lot. So it made sense, since the whole point of buying a car at that point was I wanted full on warranty so I could focus on family and school for a few years. Otherwise, yeah, just get the used car and inspect it, or have a third party look at it.

SteveLehto > random001
08/25/2016 at 10:43

Exactly. CPO cars CAN be good deals. Just don’t rely on their “inspection” and don’t think you’re getting something you’re not.

random001 > SteveLehto
08/25/2016 at 10:44

“don’t think you’re getting something you’re not”

Great advice in a lot of things in life, right there!

Justin Hughes > Urambo Tauro
08/25/2016 at 10:47

Now I want to write “as the fuck is” into my next bill of sale.

DipodomysDeserti > SteveLehto
08/25/2016 at 10:59

Correct, the CPO doesn’t affect it. I also assume you’d have to sue a dealer into honoring the Lemon Law on a used car. I actually just broke the gearshifter on my “CPO” Jeep. This is my third CPO vehicle, so I’m well versed in what is and isn’t covered. Instead of wasting time at the dealership, I just ordered one and will install it myself.

carzcarzcarz > Urambo Tauro
08/25/2016 at 11:56

This is the best and most honest used car sales add, great post from the other day. Star for you

Scimitar7 > SteveLehto
08/25/2016 at 12:02

Having worked as a technician at a dealer in the past, I can truthfully say that the biggest difference between a CPO car and a regular used car is the checklist the tech was given. Seriously.

In having this experience, you could probably imagine my eyeroll when my grandpa was all proud of the CPO 2008 Chrysler 300 he got from the local Dodge dealer in 2012. In all honesty, the car wasn’t/isn’t all that bad (for him & his purposes), but it did cause a laugh when I pointed out how the tech checked off the fog lights, rear wiper, and navigation system as “okay” when the car isn’t equipped with any of those three.

AMGtech - now with more recalls! > SteveLehto
08/25/2016 at 16:22

Completely agree. But I would argue that you have a slightly higher chance of getting a good car if it’s a cpo versus your average used car.

Would there be legal recourse if there were provable previous structural damage and the certifying manufacturer states that a vehicle cannot be certified if there were structural damage and the seller missed it on their inspection? Thus the vehicle never should have been certified to begin with.

SteveLehto > AMGtech - now with more recalls!
08/25/2016 at 16:37

That’s the problem: The certification programs all say that they cannot be relied upon by the buyer for that purpose. That’s the call I get all the time: “Something is wrong with my car that COULD NOT HAVE PASSED CERTIFICATION. Therefore, the certification was done wrong and I want out.”

I agree that they are better than cars with no warranties and they are better than cars with lesser warranties. That’s it.

AMGtech - now with more recalls! > SteveLehto
08/25/2016 at 17:38

Have you ever dealt with a Mercedes in a situation like that? I’m no attorney but I’ve never seen such verbiage on any of our paperwork. Definitely not trying to say you’re wrong here, just trying to learn. I have seen dealers buy back cars that shouldn’t have been certified though.

SteveLehto > AMGtech - now with more recalls!
08/25/2016 at 18:06

Hard to say. I don’t touch these cases. Although I hear about them all the time.

AMGtech - now with more recalls! > SteveLehto
08/25/2016 at 18:37

Gotcha. Until I hear otherwise I’m going to assume that decent dealers will own up to it and take care of the customer, otherwise the customer is probably screwed.

SteveLehto > AMGtech - now with more recalls!
08/25/2016 at 18:49

In Mich, they often sell the CPO cars as is. So there is no recourse against the seller.

AMGtech - now with more recalls! > SteveLehto
08/25/2016 at 19:06

That’s so shady. I now understand your position on CPO’s. Every dealer I’ve worked for has taken care what needed to be done for CPO’s, or not certified them, and stood behind the product if it came back. At least to my knowledge. And in my position I do tend to hear when there’s an issue, and see what gets taken care of during recon. Maybe that’s just a Benz thing, or my state, I don’t know. But I feel good about our certified cars, and that makes me happy.

SteveLehto > AMGtech - now with more recalls!
08/25/2016 at 19:22

It’s probably a little of both. I suspect MBUSA cares a little more about their reputation than some of the other makers.

Wil Haginen > SteveLehto
08/31/2016 at 11:44

Question, sort of related to “CPO”, but more on the used-car side of things. Suppose I go to a used car dealership, and armed with your knowledge, I decide to get it inspected by a mechanic. So I pay a mechanic X amount of dollars, he says it’s fine, signs off on it, and I buy it.

On the way home from the dealership, steam / smoke pours out from the engine bay and I later discover that the car had a leaking head gasket that would only present as a leak when the engine got warm.

Now, here’s my question: do I have legal recourse, then, against the mechanic for the cost (of either the car itself or the repair), or am I only able to get the “inspection fee” back?

Question 1A. Suppose that I paid the dealer mechanic for that inspection service. Does that make my position better or worse than if I had gone to an independent mechanic?

Luckily, the above situation (for me) is purely hypothetical, I’m just curious how much protection a paid inspection can provide.

SteveLehto > Wil Haginen
08/31/2016 at 12:44

1) Never pay the mechanic at the dealer to inspect it. And never believe that they inspected it “for” you, either.

2) The inspection needs to be by someone you trust. But if they miss something, then you are probably out of luck. A mechanic is not going to take $50 or $100 for an inspection and then make that a warranty that nothing will go wrong with the vehicle (i.e., a warranty).

A good mechanic would know to get the engine warm for an inspection, BTW. But the real point is that a mechanic will spot a huge number of the things the average person misses. That is what you are paying for.

I have been asked this several times, when people hired a mechanic they did not know (and had never met!) to do the inspection and they missed something. I guess any mechanic is better than none, but one recommended to you (or one you know) is best of all.

Wil Haginen > SteveLehto
08/31/2016 at 15:31

Roger that, thank you.