Why certified pre-owned programs are all the rage

Buying any car, new or used, carries a certain amount of risk. Things simply break from time to time, cars can be subject to manufacturer recalls or can quickly show up signs of a previous owner’s mistreatment.

While traditional private ownership inspections are advised and utilised by many prospective buyers, it seems manufacturers have also caught onto appealing (and lucrative) second-hand ownership approval schemes.

These programs generally involve an inspection at an official manufacturer dealership, whose staff checks over the car, its service history, its basic consumables and condition. The inspection usually includes extended warranty and roadside assistance.

This week Aston Martin became the latest manufacturer to offer a certified pre-owned program to customers interested in its second-hand models. The Timeless scheme covers all Aston models produced over the past 10 years, backing such vehicles with a one-year warranty and road-side assistance.

According to Aston chief sales officer, Christian Marti, the revised program is all about delivering peace of mind to prospective customers.

“Additions such as the new inspection regime – which for the first time includes a comprehensive assessment and review of our cars’ software, as well as their technical condition – can only add confidence for our buyers,” he said of Timeless, which is an extended version of another pre-owned certified program.

Of course, Aston is not alone with its latest program. Many luxury manufacturers already offer such a service in Australia and abroad for the same, simple reason: it delivers a new car-like guarantee that gives new owners assurance.

Figures obtained by motoring.com.au show Australia is behind other markets such as the US in pre-owned certification programs, though there has been a shift in momentum of late.

In the US, research shows that 15 per cent of online dealer listings are based on certified pre-owned vehicles, against just 4 per cent in Australia. Other figures have suggested the US take-up could be as high as 23 per cent.

However, insiders believe the Australian industry will follow a similar rise to that of the US, whose growth was recently pointed out in an annual Manheim report.

“In the US in 2015, sales of manufacturer certified pre-owned (CPO) units grew for the 5th consecutive year to reach 23 per cent of all of franchised dealer used vehicle sales, up from 4 per cent in 2000,” the report said.

For example, Mercedes-Benz, Audi and BMW each offer pre-certified owner programs.

The tick of approval is generally a validation from the manufacturer that the  vehicle in question has a clean bill of health, according to Mercedes-Benz Australia corporate communications manager David McCarthy.

“We have a pre-owned program and there are two sources for those cars: one obviously is trade-ins and the other is our company fleet,” McCarthy said, confirming that take-up had increased in Australia.

“The majority of the company-owned ones are six months old or less, and the others are few years older as trade-ins. They’re selected on the basis of whether they have service history and what the service history is. If they don’t qualify they are generally wholesaled, but it really depends on the condition of the vehicle.”

Mainstream manufacturers including Toyota and Ford have also caught onto the pre-certification program.

Toyota Australia public relations manager Stephen Coughlan said the Japanese marque’s program had also serious traction since its introduction.

“We launched the Toyota Certified Used Vehicle program back in May 2012 and have just achieved a substantial milestone in delivering the 30,000th certified vehicle,” Coughlan said.

“The program has been well received and over 80 per cent of our National Toyota dealer network now offer Certified Used vehicles.”

Coughlan said all Toyota Certified Used vehicles were hand-picked by Toyota’s dealer staff.

“To qualify for the program, the vehicles undergo a thorough 90 point inspection by our knowledgeable Toyota technicians and only vehicles that meet their strict standards are selected,” he said.

“To ensure added confidence, a background check is conducted. Buyers of a Toyota Certified Used vehicle then receive the full service history record and the balance of any remaining new car warranty if applicable (or are covered by a statutory warranty) as well as 1 year nationwide, Toyota Roadside Assistance.”