By DAVID THOME
Special to ADAMM
Industry in good position to meet new fuel mandates
Americans leased 4.4 million vehicles in 2013, about three-fourths of which will find their way into the pre-owned sections of new-car dealerships over the course of 2016 — creating a bonanza for frugal consumers who put low-mileage, original warranty coverage and dependability on the top of their must-have lists.
That’s because previously leased, or “off-lease,” vehicles often qualify for manufacturers’ certified pre-owned vehicle programs.
“Vehicles that come back from leases tend to hold their value, but they’re also just three years old and have 30,000 miles or so on them,” said Jim Slayton, sales manager for SCHMIT Ford in Thiensville. “That’s a used car you can expect to have for a long time when you consider that cars are now staying on the road for a quarter of a million miles.”
Certified pre-owned vehicles are subjected to intense inspections — often covering nearly 200 items — before a manufacturer will agree to extend the full original new-car warranty or, in some cases, even add time or miles to the original. Furthermore, any problems that are found — including recall fixes — have to be addressed.
Some manufacturers also offer certified pre-owned buyers perks such as free roadside assistance and navigation and satellite radio services for a few years.
“With a certified vehicle, the buyer has better protection than they would get with any other kind of pre-owned vehicle,” said Peter Hoffman, sales rep for LYNCH Chevrolet in Mukwonago.
Recent independent studies by Consumer Reports and the research firm IHS Automotive have shown that cars made in the past decade can be expected to last 12 years and travel 200,000 miles if properly maintained. So, Hoffman said, getting a used vehicle with only 30,000 miles on the odometer and a significant chunk of warranty left is “a pretty good bet” to be a reliable vehicle for a long time.
Furthermore, the appeal of off-lease vehicles goes beyond those usually associated with certified pre-owned vehicles because the people who leased them have incentive to keep them in pristine condition.
“They’re inspected pretty thoroughly when they’re returned,” Hoffman said. “The lessor will be held responsible for any ding or damage, and nobody wants that.”
The website LeaseGuide.com confirms this. “In general,” the site says, “leased vehicles are better cared for than purchased vehicles. Many used car buyers regularly seek out previously leased vehicles because they know the risk of making a mistake is very small.”
Jessica Anderson, a personal finance writer for the consumer-advocacy group Kiplinger, said that while certified pre-owned vehicles often cost about $2,000 more than non-certified vehicles, there are ways to find a deal for any sedan, SUV, compact, minivan or sports car you’ve set your sites on.
“Look at models that are most often leased,” she said. “A high percentage of leases are written for entry-level luxury cars, such as the BMW 3 series, Mercedes-Benz C-Class and Audi A4, and for the Toyota Prius and Camry, the Ford Focus and Fusion, and the Chevrolet Cruze and Malibu.”
Terry Schwieso, new car manager for WILDE Toyota in West Allis noted that “they say that the best new cars make the best used cars. People come in all the time looking for something dependable, something that’s going to last 100,000 miles or a lot longer.”
All manufacturers have certified pre-owned programs, and independent studies of vehicle dependability now indicate that differences between models and country of origin are very small.
CPO warranty terms and conditions vary from automaker to automaker, but in general, what they cover is usually similar to what’s covered under new-car warranties, offering signicant peace of mind.
“We always have some previously leased cars on the lot,” Hoffman said. “You can be sure that the ones we have are worth it, because if we think there’s any doubt, we send them off to auction.”