Leasing made a nice comeback in 2011 after a couple of years of virtually no leasing being done due to the financial crash of 2008. Jitters from captive finance companies, like Ford Credit, GMAC (now Ally), Toyota Financial etc. halted leasing.
The resurgence of leasing in 2011, and even more leases in 2012 mean there will be a lot of great cars coming into the market this year and next, as three-year leases, the most common, come due, and will dump many nice, low mileage vehicles into dealers’ inventory.
When I was the Ford National Dealer Council Chairman a dozen years ago, they asked me to help them come up with the best Certified program for consumers and dealers. It was a little foreign for an automaker to take an interest in selling used vehicles. This was ALL about resale value and ultimately residual values on leases. A couple of manufacturers were already big into CPO (Certified Pre-Owned) sales, and I looked for the best program out there. Much to my surprise, it was Jaguar’s CPO program that at the time looked the best. Today, every manufacturer has a certified program, although some are better than others.
Over time, I have become a huge fan of Certified vehicles, and buy them myself when I need a personal vehicle. While most people focus on the long warranty that comes with a CPO vehicle, for me the process of certification is equally as important. Although the programs vary by manufacturer, they all have processes by which the car goes through a rigorous checklist. Just about everything is checked to make sure it works and is in good order. Many of the programs require such things as new wiper blades, two working keys and remotes if the car is equipped with those, and they must also have a clean history. Management of the dealership has to sign a form saying all work was done.
Other perks of a Certified Pre-Owned car often include incentives such as low interest rates, roadside assistance, and a full tank of gas. In other words, it is as close to a new car as a used car can get, often for a fraction of the price of a new car. Most CPO cars have the balance of a five or six-year warranty that extends to 100,000 miles or beyond.
Some of the luxury cars give long warranties on top of current mileage when the car is sold. Price-wise, certified cars generally run more than non-certified cars, but the process the car goes through, the incentives associated with it, and most of all the warranty that is included make it all even out in the end. Best of all, you get the peace of mind of knowing the car was gone over with a fine-toothed comb.
The only pitfall is to make sure the Certified Pre-Owned car you look at is part of a factory program. For instance, if you are looking at a Lexus CPO, make sure the dealer is part of the factory program, not his own certified program. Generally, only same brand dealers can certify cars. For instance, a Toyota dealer cannot sell a factory certified Lexus, and vice versa.
All in all, I think factory Certified vehicles make a ton of sense and there is little doubt they will save you money over the long haul.