Ford beefs up certified used warranties in bid to lift sales

In an effort to boost sales, Ford Motor Co. has expanded the warranties on its nonluxury certified used vehicles.

The comprehensive limited warranty covering Ford and Mercury certified vehicles is now 12 months or 12,000 miles, up from 3 months or 3,000 miles. The powertrain warranty covering those vehicles is now seven years or 100,000 miles, up from six years or 100,000 miles. The expanded warranties became effective Feb. 2.

The Lincoln certified used-vehicle warranties are unchanged, but the company has increased marketing support for Lincoln, Ford and Mercury brands' certified programs. Lincoln vehicles are covered by a 72-month or 100,000-mile comprehensive limited warranty from the date the vehicles are sold as new.

The automaker discontinued Mercury at the end of 2010 but supports the brand's certified pre-owned program.

Terry Kidd, owner of Kidd Ford-Lincoln in Morrison, Tenn., says Ford's certified-vehicle warranties were competitive before, but the longer warranties give customers -- especially those who buy certified Mercury vehicles -- more peace of mind.

"This gives people peace of mind that their used Mercury is totally supported," he says. "I think that is very important."

John Felice, general manager of Ford and Lincoln marketing, says the company changed the warranties on Ford and Mercury certified vehicles to make them more competitive with other major, nonluxury certified used-vehicle programs. Another goal is to strengthen the brands' already strong used-car residual values, he adds.

"We've seen good progress in residual values," he says. "Certified pre-owned is a catalyst to continue that momentum."

In 2011, overall certified used-vehicle sales increased 6 percent to 1,742,147 units. Sales of certified Lincoln and Mercury vehicles, which are reported together, rose 10 percent to 21,571 units.

But at the same time, sales of certified Ford brand vehicles dropped 4 percent to 108,761 units. That decline was the impetus "to re-energize certified pre-owned and put more effort there," Felice says.

Ford division sold 8,357 certified units in January, up 15 percent over January 2011. Certified sales of Lincoln and Mercury rose 52 percent in January to 1,900.

Felice says most of the 3,330 Ford and Lincoln dealerships in the United States participate in the company's certified programs.

The company is increasing its marketing support for the programs with online, print and radio advertising. It also is offering finance rates as low as 1.9 percent for as long as 36 months through April 2 on certified used vehicles for qualified buyers.