Deals on Wheels
Like just about everything else in the world of car buying, CPO purchases are not set in stone. Buyers can negotiate better terms, longer extended warranties, free service appointments and other extras
“Technically, everything’s negotiable,” Cars.com senior editor Joe Wiesenfelder said. “But that doesn’t mean the dealer will be flexible.”
Your best weapon when bargaining for a CPO is having all the facts and figures right at your fingertips.
“If you want to negotiate the best deal possible on a CPO vehicle,” said Keith Whann, outside general counsel for the National Independent Automobile Dealer Assn., “you do that back in your home, office or library … because you want to be a well-informed consumer.”
One way of doing that, said James Hope of Volvo North America, is comparing and contrasting the attributes of various CPO programs. “Price is only one component the consumer should consider,” he said. “Companies like Intellichoice offer consumers unbiased third-party evaluations of the various programs to help consumers get the best value they can for their money.”
Start by determining what your target vehicle is probably worth — if not an exact dollar amount, at least a ballpark figure. While it’s not too hard to find out what a dealer has paid for a new car, used cars are a whole different story.
“Only the dealer knows what she or he paid for it,” said Joe Spina, senior manager of remarketing at Edmunds.com. “They could have paid top-dollar in an open-bidding environment or they could have acquired it cheaply from an uninformed customer trading it in. With that in mind, it is very important to know the value of the vehicle when negotiating.”
Spina recommends that potential buyers check out the CPO section of the Edmunds website, which offers guidelines on pricing that can be used in making an opening offer to a CPO dealer.
Dealers are generally more likely to move down on price on a vehicle that has been in inventory for a long time. “Research what special incentives are available … and check vehicle inventories at a few dealerships,” Hope said. “If there are more vehicles like the one you are shopping for, there may be more room for negotiation.”
But don’t do everything based on price, Reed said. “Even though these vehicles are CPO, there will be differences in the condition levels. Take this into consideration when making your deal. And if you get a screaming deal on price, watch out in the finance … office because they might be more aggressive about selling extras. Keep in mind, however, that CPO vehicles are considered the dealership’s premium used cars, so they will not discount them as much as they would a noncertified used car.”
One thing to thoroughly scrutinize is the vehicle’s warranty. Almost all CPO warranties are superior to those offered with noncertified vehicles. But some CPO warranties are better than others, in particular those backed by the manufacturer.
“I definitely wouldn’t pay as much for a third-party [dealer] certification as I would for factory certification,” Wiesenfelder said. “Automaker-backed warranties are known quantities with a reasonable degree of coverage. With third-party types, it’s anything goes.”
CPO dealers sometimes offer other incentives like emergency road service and towing, or loaner cars during service appointments. If these extras aren’t offered up front by your dealer, there’s nothing to stop you from trying to negotiate them into your overall package.
Another factor to work into the negotiations — especially if you are purchasing a dealer- rather than manufacturer-backed warranty — is what happens if the vehicle breaks down or needs repairs in a place other than your home city or state. A manufacturer-backed warranty should cover that possibility — assuming there is a dealership near the place where you need help — but a dealer-backed warranty may not.
“It does not help me if I bought the car in Columbus, Ohio, and I drive out to California and break down,” Whann said. “I need to get that car repaired and back on the road.”
And you want to get all of it in writing, Whann said. “Make sure that everything that has been promised is in the deal.”
—Joe Yogerst, Custom Publishing Writer
