Cadillac is again offering a bumper-to-bumper warranty on its certified used vehicles, a move the luxury brand says makes it more competitive with rivals' programs.
The warranty took effect last week and covers six years or 70,000 miles, starting from the time the vehicle was bought new. It is two years and 20,000 miles longer than Cadillac's new-vehicle warranty and replaces a 6-year/100,000-mile limited warranty on certified used vehicles.
The new warranty covers "hundreds" more parts than the previous program and matches customers' driving habits of meeting the six-year limit before driving 100,000 miles, a Cadillac spokesman said. Shifting the warranty from 100,000 to 70,000 miles also enables Cadillac to offer the new coverage without increasing the $1,195-per-vehicle fee dealers pay to cover certification, he said.
Before April 2009, certified used Cadillacs were covered by a bumper-to-bumper warranty similar to the new program. But the coverage was reduced because of General Motors' 2009 bankruptcy restructuring.
Chase Hawkins, Cadillac's vice president of sales and service, said the new warranty makes the brand's certified program more competitive with those of other luxury marques.
"We were competitive. We were kind of in the space but had a limited warranty like some of our competitors have," Hawkins said. "If you look back in history when we used to have a bumper-to-bumper warranty, we did some great volume. It's returning to what works for us."
The company has expanded its pool of certifiable vehicles to those 5 years old and newer with as many as 60,000 miles. That is up from vehicles 4 years old and newer with as many as 50,000 miles.
The new warranty covers items such as paint, wheels, interior and exterior trim, headlights and mirrors, which were not covered by the previous program, the spokesman said.
Hawkins said Cadillac changed the program in expectation of twice as many Cadillacs coming off lease this year compared with last year.
Cadillac dealers sold 1,575 certified used vehicles in April, a 19 percent increase over the year-earlier month. Through April, the brand's dealers sold 6,316 certified used vehicles, up 4 percent over the same period last year.
Jeff Maes, Cadillac remarketing manager, said the brand's certified used sales could grow 20 percent this year. Cadillac sold 16,609 certified used units in 2012, down 28 percent from its sales in 2011. In 2008, dealers sold 41,598 certified used Cadillacs.
"We'll start to see an influx in the back end of the year of some of our off-lease products, and that's a great opportunity for us to start certifying those vehicles as well," Hawkins said. "This is an increased profitability opportunity for our dealers, brings new customers into the fold for us and strengthens the residuals of the brand overall, too."