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What's the real skinny on this manufacturer's certified pre-owned business...

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Dear Tom and Ray:



What's the real skinny on this manufacturer's "certified pre-owned" business that dealers sell? I know they talk about 125 inspection points that they "rigorously put their cars through." What do you guys think of this scheme? It seems somewhat safer than going to "Fly-By-Night-Used-Car-Sales." But then again, the price is higher. What's your advice? -- Paul

TOM: Well, the 125 points of light on their own are not that appealing, Paul. But the warranty that comes with them can be.

RAY: The inspection is nice, but -- no matter what -- I would always have a used car inspected by my own mechanic before I bought it. I don't care how rigorous an inspection the seller claims to have done. He's still trying to sell you the car, after all.

TOM: However, if the "inspection" allows him to sell the car with a significant warranty -- above and beyond what's left on the manufacturer's original warranty -- then it's worth something.

RAY: And you're absolutely right. An inspected and, more importantly, warrantied car is preferable to an uninspected, unwarrantied car. And because of that, you'll pay more for it.

TOM: Dealers generally start out with the cream of the used-car crop, anyway -- mostly the off-lease vehicles that are two or three years old and still have low mileage (because the lease threatens to charge the poor schmoes $1.25 a mile if they drive more than 36 miles a year). And the dealer is particularly well-qualified to fix any problems on its own makes and models. So it's not much of a stretch for dealers to fix the small things that are wrong with these low-mileage cars and sell them as "certified" with warranties.

TOM: And when you're in a business as disreputable as the used-car business, using terms like "manufacturer," "pre-owned" and "certified" does provide a patina of trust that can help sell your cars. Not to mention that by calling your cars "certified" and "pre-owned" cars, you automatically imply that everyone else's cars are "neglected" and "slept-in."

RAY: But as long as this mostly marketing device is backed up by an airtight warranty, we have absolutely nothing against it, Paul.
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