How to find the best deal on a certified used car
A flood of returning lease cars this year will lead to record sales and bargain prices for certified used vehicles.
Cars that were leased for three years in the boom sales year of 2013 -- totaling an estimated 3.1 million -- will return to dealers this year, estimates Tom Webb, chief economist for Cox Automotive. Many of those will wind up as certified used cars, leading to better deals for vehicles that have had a full inspection and that come with a new warranty.
Senior analyst Ivan Drury of Edmunds.com says he looks for a continuation of a trend that saw certified used cars selling for an average of 4.2 percent lower in 2015 than a year earlier.
In recent research, Edmunds polled potential used car buyers and found that 88 percent said they would be willing to pay more to get a certified car rather than an ordinary used car, which comes without a special inspection or a new warranty. Of that group, 38 percent said they would pay up to $1,000 more for the certified vehicle.
If you fit that category and are interested in a certified used car as a money saver vs. buying a new car, consider looking at subcompact, compact or midsize sedans, counsels Edmunds' Drury. With gas prices low and SUVs selling the best, these sedans offer the best bargains.
One example is the midsize 2013 Ford Fusion (pictured above). A certified 2013 Fusion SE with about 40,000 miles is selling for an average $15,770, according to Kelley Blue Book, That is $900 more than the same used car without certification. A new 2016 Fusion SE typically sells for about $22,940.
If a certified used car sounds attractive, here are some points to be aware of:
-- Calling a used car certified doesn't guarantee anything. Independent used car dealers may use the label when only the dealership stands behind it. Look instead for a manufacturer-backed certified program. There, an inspection of 150 points or more is mandated. And the guarantee on the new warranty comes from the automaker, not the dealership.
Be sure about the details. Even certified programs from manufacturers differ widely. Edmunds rates the Korean corporate siblings Hyundai and Kia as having the two best certified programs. That is chiefly because of their 10-year or 100,000 mile new-car powertrain warranty, which transfers to used car buyers. Rounding out the top five certified programs are Lexus, Volvo and a tie between Honda and Mazda.
Chevrolet and other General Motors brands add a 12-month, 12,000 miles new certified warranty and a five-year, 100,000 mile powertrain warranty from the date the car was first sold as new. The GM warranties have no deductible. To compare certified programs, use this tool at Edmunds.com.
-- Older cars can be certified as well as one- to three-year-old vehicles. Certified used cars are often discussed as used alternatives to new cars. And indeed, many certified cars are two- or three-year-old models that are returned after a lease. But most manufacturers will certify cars up to five or six years old with 70,000 to 80,000 miles on the odometer. If you are in the market for a car of this vintage, a certified vehicle might make sense.
Are certified used cars worth considering? If you do your homework, your risk of having problems should be lower than with regular used cars. And, depending on the manufacturer, you get a variety of perks. GM provides free visits for scheduled maintenance for two years or 24,000 miles. Lexus provides a loaner car when your certified car comes in for service. And numerous manufacturers provide roadside service for certified cars similar to that provided for their new cars. For any of these features, though, be sure you have read all the fine print.
