WHAT IS THE DIFFERENCE BETWEEN A CERTIFIED PRE-OWNED VEHICLE AND A PROGRAM CAR?

By: Lawrence S. Searcy, Jr.
In a tight economy many consumers opt for a used vehicle rather than a new vehicle to save money. Consumers are often presented with different terms like Certified Pre-Owned or Program Car when shopping for a quality pre-owned vehicle. While the terms “certified pre-owned” and “program” vehicle are often used interchangeably by car buyers, they have completely different meanings. A certified pre-owned or “CPO” is one sold by a manufacturer’s franchised dealer on the dealer’s used car lot after undergoing a rigorous inspection. A program car, on the other hand, is a loosely defined term that could include rental cars, vehicles driven by employees or dealer demonstrator car. The reason the distinction is important is because with the consolidations and closings in franchised dealerships, many non-franchised used-car dealers are advertising “program cars” as if they were certified by the manufacturer. Since these dealerships no longer have a new car franchise, they cannot “certify” a used car in accordance with the manufacturer’s guidelines.

In 2008, more than 700 franchised dealerships closed across the country. By July 2009 the number of closings for the year had already topped 1,000 with an estimated 2,200 closings by the end of the year according to the National Automobile Dealers Association. Many were closed because of the economic downturn and many others will close because of the General Motors and Chrysler bankruptcies. Some of these closed franchised dealerships are trying to survive with a used car only operation. In an attempt to maintain a competitive edge, these used car dealers are advertising “program cars” to appear as if they have passed the rigorous tests associated with a certified used car.

A program car is usually defined in the car industry as a late model used car with low mileage. A dealer demonstrator may also be referred to as a program car but it must be sold as a new vehicle since it has never been registered or titled. According to Carfax, approximately 70% of “program cars” are rental cars that are subsequently sold at car auctions. They may not undergo any type of pre-sale inspection and are not sold with any type of extension of the manufacturer’s warranty. A program car may have some of the remaining factory warranty left on it but an additional service contract will cost the buyer extra money.

A “certified pre-owned car” on the other hand must be sold by a franchised dealer and undergo a rigorous inspection process. The vehicle must fit within the manufacturer’s mileage and age restrictions and cannot have prior damage or suspicious title histories. Most CPO programs require a Carfax report or similar title history be given to the customer. The Carfax report will detail the car’s origin, title history and any reported accidents in the vehicle. In addition, the CPO program will extend the manufacturers warranty on the vehicle for additional time and mileage. A program car does not have to meet these requirements.

As an example, General Motors’ CPO program requires that only certified GM dealers sell CPO cars. The vehicles must be less than 4 years old and have a mileage restriction of less than 75,000 miles. GM-trained technicians will conduct a 117-point inspection of the vehicle and repair any non-conforming item. The dealer will also check the Carfax report and be sure no deficiencies exist with the title or damage history. Once the vehicle passes inspection, it will have an additional 12-month or 12,000-mile warranty attached to it from the date of sale. Also, the powertrain warranty will extend to 100,000 miles or 5 years from the original in-service date. Other manufacturers programs are similar and can be found by looking at the manufacturer’s website.

Before buying any pre-owned vehicle, research the dealership, the manufacturer’s Certified program, and the vehicle itself on the internet. Any additional questions should be answered directly by the sales associate. If a dealer is reluctant to disclose the CPO inspection report or the Carfax report, go to a dealer that will provide the information willingly. For more automotive news and information about car purchases, visit http://www.walkerautomotive.com/.

TREATS IN TRUNKS

On October 31, 2009 Saturn of Alexandria will sponsor the third annual Walker Automotive “Treats in Trunks”. This event provides a safe trick or treat location for families. Walker employees will hand out candy and there will be a host of fun games and treats for people of all ages. This year’s event will raise money for The United Way of Central Louisiana and AMIKids – Alexandria. The scheduled time for the event is from 4:30 p.m. to 6:00 p.m., at Saturn of Alexandria, 1515 Dorchester, Alexandria. Every year local companies contribute to assist with the event in the form of donations and prizes. Look for the November Newsletter which will contain a full list of companies that helped make Treats in Trunks possible. For more information, contact Khristi Romero at 318-445-6421.


AMI Kids is a non-profit organization dedicated to helping troubled youth develop into responsible and productive citizens. AMI Kids has been active in Alexandria since 2006, there are 56 AMI Kids programs in eight states including 9 programs in Louisiana. The United Way is a non-profit local partnership that links donors and helping agencies with business, government, and other key players in central Louisiana to build a stronger community.