“Certified” Used Car–Fact or Fraud?

The manufacturers and dealers are touting “certified” used cars as “like new”. As you might suspect, my firm has handled dozens of “certified” used car cases where the cars have serious collision damage or a lengthy history of serious mechanical defects. The “certified” designation can be a fraud.

Ultimately, all a “certified” car usually means is that it has had an inspection from one of the dealer’s mechanics who has been trained to do a “certified” inspection. A “certified” inspection is somewhat more thorough than a regular used car inspection, but not by much. The idea that the car is returned to the factory for inspection is simply false.

“Certified” used car programs arose because, in the 1990’s, manufacturers (led by Ford) started emphasizing leasing instead of selling as a way to move cars off the lot. When the leases would expire, the manufacturers and the dealers would have to find a way to sell off these used cars without taking a loss on them, and the volume of lease-return used cars grew steadily. The birth of the “certified” used car came about as a solution for selling these lease-return vehicles while maintaining a premium market price. Otherwise, the good old law of supply and demand would drive down used car prices because of the glut of lease-return vehicles hitting the market.

So, even when buying a “certified” car, it’s a good idea to ask for the vehicle’s repair history and also have your own mechanic inspect it. If you meet a lot of resistance to these requests, consider going to another dealer.

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