Volvo Cars of North America Inc. has improved its used-car warranty, doubling the miles covered but also restricting the program to newer cars.
The new warranty is good for the remaining new-car warranty, if any, plus 24 months or 24,000 miles. The new program is called Volvo Certified Pre-Owned. The old program, Volvo Select Pre-Owned, covered either the balance of the new-car warranty, or 12 months/12,000 miles, whichever was greater.
'These changes basically recognize that these cars really last, they really are very durable, and we found there was some value we could pass along to the customer,' said North Holbrook, manager for Volvo's 'V-line' wagon lineup. Before a reorganization earlier this year, he also was responsible for Volvo's used-car programs. The new manager for the used-car line is Jim Corcoran.
The new Volvo Certified program began June 1.
Besides a longer warranty, the program has other benefits for consumers: Volvo eliminated the customer deductible on service visits, which had been $50. Volvo is offering lower, cut-rate financing - 4.9 percent to 6.9 percent on Certified cars. The company is not advertising the lower rate. When the original Select Pre-Owned program debuted last fall, Volvo advertised 6.9 percent financing.
Volvo also doubled the amount of warranty work dealers can authorize without Volvo's prior approval, from $250 to $500.
The cost to dealers to participate in the warranty program stays at $400 per car. And Volvo dealers continue to perform the necessary inspecting and reconditioning.
On the other hand, Volvo made fewer cars eligible for the improved warranty. Before, cars up to 5 model years old or newer were eligible, with up to 75,000 miles. The new program covers only cars from 2 to 4 model years old, with 60,000 miles or less.
'Your costs really start to go up after that fourth year,' Holbrook said.
Volvo also stuck with the existing 50-50 ratio of matching co-op advertising costs with dealers, up to $150 per car. When the Select Pre-Owned warranty was introduced last fall, Volvo contributed 75 percent, up to $150, for the first six months, to jump-start the program.