Buying a used car with confidence

As cars become more complex, there’s more that can go wrong with them than ever. Add to that a touch of neglect by their first owner(s) and you are potentially facing a whole world of hurt – and financial woes – when buying a used car.

Yet, some mainstream car manufacturers – and as you’ll see, not nearly enough – have set up used car programs (known as Certified Pre-Owned programs – or CPOs) that offer the very best of used trade-ins or company fleet vehicles, often with extra warranty and, in one case, free servicing. A CPO vehicle might not be perfect, but you’ll have peace of mind knowing you’ve bought a used car that is the best of the bunch.

The downside? It’s not going to be the cheapest. Buy a car privately or through an auction house and you might save thousands of dollars over a CPO car. However, you might also have to plough more than a few pennies back into your purchase if things go wrong with it.

There are just five mass-market manufacturers who offer factory-approved used cars, compared to 15 manufacturers in the prestige market.

Indeed, Australia is well behind the leading CPO markets – there’s up to a 23 per cent take-up rate in the US, for example.

However, there will be more CPOs coming later this year – FCA Australia will introduce such a program across its Alfa Romeo, Fiat and Jeep brands in the fourth quarter.

Basic CPO inclusions
CPO vehicles are the pick of the litter: often the most carefully maintained used vehicles are traded-in for a new one at a dealer of the same brand, so these are often prime candidates to be turned around and sold as a CPO vehicle. Likewise, manufacturer company fleet vehicles are often a good source of quality used vehicles, and most brands run such a fleet (often with a high turn-over) for their employees.

All of the CPO programs offer vehicles for sale that have been looked over with up to a 120-point check and any parts needing replacement are done so with new factory parts by factory-trained technicians. As vehicle electronics become more complex, software updates are often needed – and these are also checked and updated if required.

From there on, the CPO programs vary significantly.

Age and kilometre cut-off
Some manufacturers include much older vehicles in their CPOs than others. For example, Toyota includes cars up to 10 years old and up to 160,000km. Subaru and Volkswagen offer CPO vehicles of up to five years old, with Subaru capping kilometres at 125,000km and Volkswagen at 120,000km. Hyundai and Renault only include vehicles under three years old and up to 100,000km.

The little extras
While all licensed dealers have to guarantee title (meaning that if the previous owner has money owing on the car or the car is stolen, you are covered), Hyundai guarantees that the CPO’s odometer reading is correct, and both it and Subaru check that their vehicles have a full service history. Toyota says that to pass as a Toyota Certified vehicle, it must not only have a full service history but have also passed a CarFacts background check.

Renault is the only company that throws in free servicing: you get two annual/15,000km services as part of the Renault Approved CPO deal.

Hyundai provides its Hyundai Certified Pre-Owned customers access to myHyundai, its owner site that features service information, driving tips, maintenance advice and exclusive offers.

Only some get warranty
While additional warranty is a given in the CPO luxury/prestige segment among the mass-market offerings, it is the exception rather than the rule.

Only Subaru and Volkswagen give a warranty over and above the remaining NCW: it’s a 12-month warranty for both brands.

However, with Volkswagen, there’s a big catch – you will have to pay an additional $1100 over the cost of the vehicle for the warranty (which is bundled with 12 months roadside assist) and it doesn’t cover paintwork. Toyota will only give a statutory warranty, if applicable; in most states, that’s three months/5000km.

While Subaru is the only mass-market company to offer CPO cars with a warranty at no extra cost, there are a lot of strings attached in the terms and conditions. There are many components that the warranty will not cover: key among them are paint, wheels, lights, exhaust, interior trim and any damage attributable to an LPG conversion not endorsed by Subaru. Also, the Subaru warranty doesn’t kick in if there’s any dealer statutory warranty active. On the bright side, if there’s a failure covered by the warranty, Subaru will replace consumable items if it deems it necessary as part of the repair for free.

Subaru’s warranty is transferrable, but it’s not straight-forward. The new owner will have to supply a copy of the receipt of vehicle sale, a copy of a current roadworthy certificate or vehicle inspection report, a copy of the scheduled service records contained in the warranty book and pay a $75 transfer fee (including GST).

Another option open to customers is purchasing a warranty from a third party at the same time they buy the car.

Breakdown cover included
Renault’s five-year NCW includes roadside assist for the full period, so Renault Approved vehicles have the balance remaining (a minimum of two years).

Hyundai, Subaru and Toyota however only provide 12 months of roadside assist with their new vehicles, so a fresh 12 months is offered with their CPOs. Volkswagen NCW includes roadside assist for the three-year period; if that has expired you can get 12 months of roadside assist bundled with the one-year warranty as mentioned above.

The mass-market brands CPOs certainly offer extra peace of mind when buying a used vehicle, but they have a way to go before matching the features of the prestige-market CPO deals.

*Hyundai Certified Pre-Owned and Renault Approved vehicles are a maximum of three years-old and so have the balance of five-year NCW remaining.

*For Volkswagen Das Welt vehicles whose three-year NCW has expired, on purchase a 12-month warranty and breakdown cover can be obtained for a $1100 fee.

*Subaru warranty transfer requires a copy of the vehicle sale receipt, a copy of a current roadworthy certificate or vehicle inspection report, a copy of the scheduled service records in the warranty book and payment of a $75 transfer fee (including GST).