Certified Used Car Programs Come Under Fire As Consumer Groups Question Need

Washington DC July 11, 2005; The AIADA newsletter reported that as more and more automakers work to bring consumers certified pre-owned vehicles -- those that have passed the manufacturer’s rigorous inspections -- consumer advocates and lawmakers are claiming that buyers are being overcharged in some cases for vehicles that aren’t significantly different from ordinary used cars that haven’t gone through this type of testing.

According to a report in The Wall Street Journal, Dozens of lawsuits filed across the country over the past few years have begun to raise questions about used-car certification practices, “which can vary significantly among brands and dealerships.” Just last month, a lawsuit filed in California’s Superior Court against Ford and one of its dealerships in Southern California, claimed the automaker’s certified used car program included “misleading advertising and unfair pricing.” The lawsuit, filed in California Superior Court, is seeking class-action status.

Another suit filed late last year in the same court against DaimlerChrysler AG and a Chrysler dealership, also seeks class-action status, alleging “consumers are being sold used rental cars through Chrysler’s Five-Star Certified Pre-Owned certification program but that dealers don’t always disclose the fact -- an issue because rental cars typically command a lower resale value than normal used cars.” Pushed by consumer advocates, lawmakers in California have gone so far to attach a bill to the broader “Car Buyer’s Bill of Rights” that would “tighten the definition of what can be advertised as "certified pre-owned,” and among other things, would make it illegal to sell any car with prior known frame damage as a certified used car.

In January, Massachusetts lawmakers introduced a similar piece of legislation.” More from the Journal: “On average this year, certified used cars are selling for about $951 more than a noncertified used car, according to data from Leedom & Associates.” Along with a rigorous point inspection, most manufacturer-backed certification programs will also offer a warranty, although they vary widely in coverage and criteria for selecting cars.