Wheels and Deals

Buying Certified Pre-Owned

A fancy term for used cars and trucks that undergo factory-guaranteed inspections (though the tests are done by local dealers), certified pre-owned vehicles are about $1,000 pricier than noncertified cars, but they're usually in prime condition. According to J.D. Power, CPOs accounted for 38 percent of all sales at used-car dealerships in 2005.

For budget-conscious business owners, CPOs can save you thousands of dollars on 2- to 6-year-old vehicles with up to 60,000 miles on the odometer. Many are sold with a free extended warranty if the original warranty is close to expiring. Read the fine print to make sure all the components are covered by name, ask what the exclusions are, and make sure coverage includes service on the road as well as at your local dealer.

Sure, CPOs aren't brand-new vehicles, but odds are, you won't have to add expensive options, since many buyers can find a CPO that's already equipped with what they need. Many CPOs are off-lease after two years, which often means they are clean, well-maintained and well-equipped.

Manufacturer certification procedures include a checklist of more than 100 items, such as the powertrain, chassis, electronic and electrical systems, suspension, frame, steering, brakes and many others.

GM sells CPO vehicles that are up to 6 years old with a maximum of 60,000 miles on the clock. Its dealers put vehicles through a 112-point inspection, offer 24-hour roadside assistance, and provide a vehicle history report, since it's important to know if the vehicle has been in a wreck. The 112 items include a road test to check performance and acceleration, transfer case operation, body-chassis integrity, anti-skid/traction control, shifting, steering and alignment. Under the hood, the ignition, fuel and starter systems are checked. Then the mechanics go under the vehicle to examine the shock absorbers, driveline, axles/differentials, brake hydraulics and springs. Ask for a copy of the complete checklist.

Dodge ups CPO mileage limits to 65,000 miles, and has a 125-point inspection, plus 24-hour roadside assistance, a vehicle history report, a rental car and service coupons. Toyota's meticulous CPO 160-point list, in addition to the standard checks, ensures there's no abnormal engine noise at a cold start; license plate lights are working; light bulbs aren't cracked; and tires are the same brand, size and load rating. Nissan's CPOs undergo a 142-point inspection and are protected by a 36-month/100,000-mile limited warranty.

Additional savings on CPOs come from reduced-rate loan incentives offered to qualified buyers by a few manufacturers. GMC's financing options on CPOs range from 2.9 percent to 3.9 percent; Ford's are a uniform 4.5 percent; and Honda offers 4.9 percent. Chrysler, Dodge, Toyota and others are not offering these incentives at press time, but programs can change week to week.

Some used-car lots and dealerships that sell only used cars are certifying vehicles as CPOs, but they may not be factory-backed. Ask for the Vehicle Identification Number (VIN) on a vehicle you're considering and check with the manufacturer to see whether it's covered in their CPO programs.

Most CPOs carry a warranty. GMs are supported by a zero-deductible, three-month/3,000-mile comprehensive limited warranty.

Compare CPO programs at sites such as www.autos.msn.com and www.edmunds.com.

Something Extra
The 2006 pickups, vans and SUVs are already well-equipped, and adding pricey extras to the bottom line when buying vehicles for your business can be a financial concern, but a few well-considered, affordable options might save you money in the long run.

Safety features should be one of your priorities. While 2006 light trucks are designed to protect drivers and passengers with reinforced side-impact door beams, energy-absorbing steering columns, head restraint bolsters, anti-lock brake systems and even a loose fuel cap alert, additional safety options not only help prevent damage and injury during a crash, but can also lower your insurance premiums.

Among the most popular extra features are side air-bag window curtains for head protection, back-up warning systems that sense obstacles behind the vehicle, traction control, stability control, roll mitigation, and adjustable pedals, which are convenient if you have several different drivers. Ford's bestselling SUV, the Explorer, includes AdvanceTrac with Roll Stability Control as a standard feature, while its Freestar cargo van is a "Best Pick" by the Insurance Institute for Highway Safety. Adding similar options to your vehicles can make a potentially life-saving difference in an emergency.

Hydraulic rocker panels that slide out, or steps to assist in exiting a vehicle or for reaching cargo on a roof rack are useful on large vehicles. Navigation systems such as OnStar are a popular option, not only because they offer safety, security, theft-prevention, information and GPS service, but also because they can be used to track fuel and oil usage in fleet vehicles. Each month, the vehicles automatically send this information to OnStar as a maintenance and cost-checking control. OnStar can also get you back into the vehicle if you've left the keys in the ignition; send emergency assistance; and provide hands-free, voice-activated phone calls. GM offers OnStar on dozens of light-duty models. Dodge makes Uconnect, a hands-free Bluetooth system, available. Navigation systems aren't limited to OnStar-dozens of other systems are available on the web, including portable devices.

Keep your sales and delivery drivers happier with a Sirius or XM satellite radio system. In addition to being factory-installed at purchase, they're an option for business owners who already have a standard radio and want to upgrade at the dealership. Ford already offers the option in the F-150, Explorer and Mountaineer for $195, including a free six-month subscription or an upgrade later at the dealership. XM's NavTraffic has a real-time traffic information service.

Need something else? Businesses that must accommodate extra-long cargo can opt for a bed extender. Nissan offers a sliding version on its Titan. Smaller additions include flashing turn-signal mirrors, available from www.muth.com and other websites. Or obtain other aftermarket items from www.sema.com, where you'll find dozens of options that can be added to commercial vehicles.

Jill Amadio is Entrepreneur's "Wheels" columnist.
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This article was originally published in the December 2005 print edition of Entrepreneur with the headline: Wheels and Deals.

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