General Motors and American Honda Motor Co. are among the automakers closely monitoring dealership compliance with their certified pre-owned programs and sometimes cracking down on those that don't follow their rules. It's unfortunate that automakers must sometimes temporarily bar an errant dealer from CPO participation, but it's a necessary step.
Certified used-vehicle sales are too important to automakers and dealers to tolerate exceptions that could disenchant consumers.
Pioneered by luxury marques in the 1990s, CPO programs now are offered by most brands. Participating U.S. dealerships sold 2.1 million certified used vehicles last year.
Manufacturers have different CPO qualifications for vehicle age, mileage and condition, but the basic idea is simple. Automakers select certain dealerships that take late-model, low-mileage, same-brand used vehicles, rigorously inspect them and repair mechanical and cosmetic flaws. Those vehicles are certified with factory-backed warranties and resold.
Properly run, CPO programs offer something for everybody. Consumers like used vehicles with fewer safety and reliability concerns. Dealers like the bigger margins. Manufacturers like having an outlet for vehicles coming off lease that also supports brand residual values. But all those benefits evaporate if consumers don't believe CPO vehicles are superior to other used cars.
Manufacturers should strictly enforce standards. Their brands are on the line. Dealerships should, too, in their own self-interest. The few that break the rules risk more than their own reputation. They also unfairly risk the reputation of the brand, other dealers of the brand and ultimately every franchised dealer with CPO sales.
