The move to recondition used cars to factory specifications and to guarantee those cars to customers was started by Lexus in 1993. Manufacturer certification programs grew steadily since then until the past year or so, when the number of offerings skyrocketed. Late last year, J.D. Power and Associates reported that an estimated 35 percent of all 5-year-old and newer used vehicles purchased in 2002 were certified.
Now, with so many other manufacturers in the game, dealers' profits have fallen. But profitability isn't the sole benefit of certification, explains Lou Bregou, director of operations at Burdick Automotive.
The dealership group, which handles 23 franchises in 11 locations in central New York, participates in manufacturer certified programs and even has its own program because customers like buying reconditioned cars that are backed by the factory and/or the selling dealership, he says.
Dallas dealer Jerry Reynolds is bullish on Ford's certified program. He says all the dealers he knows who have really tried it have loved it.
"The front-end grosses are higher, the back-end grosses are higher, and most important, the certified cars turn in about 18 days, vs. 35 for a regular used car," Reynolds says.
New Mexico Volkswagen dealer Jack Price admits he was skeptical of certification programs.
"At first, I couldn't see the value of it," he says. But now, he feels the old stereotype of buying used with little reassurance of value has evolved to the point that consumers have confidence and peace of mind.