New or Used: A CPO Solution To European Vehicle Snobbism?

I know that European vehicle snobbism is often frowned upon here, but I do love the look and feel of German cars better than any other. The downside seems to be maintenance costs, that they are simply not affordable to own.

I’m going to be looking for a car in about the $20-25k range, so my choice is between pretty dull new Japanese cars and a circa 2008 BMW 328i or Mercedes C300. Both of them seems to be really attractive cars, but of course the enthusiast crown always goes to the BMW.

What I’m wondering is if the Certified Pre-Owned (CPO) program might be the answer. I’m sure most of you already know this, but the general idea is that they inspect and recondition low mileage used cars, give them a comprehensive warranty and basically treat them like almost new vehicles. The Mercedes program is the best known, but BMW appears to be coming on strong with an offer of five years free maintenance. On paper that should mean nearly cost-free ownership save brakes and other wear items.

I would of course pay to extend the warranty to the maximum term – I think it’s four years for Mercedes and five for BMW. I drive about 10k miles per year, so the car should remain under that warranty for my entire ownership of the vehicle. After that four or five year ownership period, I would sell or trade it in and repeat the process.

I’d like to hear experiences with these programs, with each manufacturer (and possibly others you feel I should consider). How would you compare the Mercedes and BMW programs? And are there any downsides to this compared with buying a new, lesser vehicle I should consider?

I am the least handy person in the world – if I lifted up a screwdriver and tried to fix something in my car, it would probably explode.

So I’d like to hear …

(1) Anyone have direct experience with these programs, for each make of car? How was the service? I would obviously be putting great trust in the dealer, because I really have little recourse if he doesn’t hold up his end of the deal.

(2) Any negotiating tips? What kind of discount should I expect from the asking price? I am a little surprised that prices for CPO BMWs or Mercedes seem, if anything, a bit lower than what other dealers and private parties are charging on Craigslist.

(3) Any other cars I should consider, and any new cars I should consider that might offer similar driving enjoyment in this price bracket.

Thanks for any thoughts!

Steve answers:

My advice would be to educate yourself. BMW and Mercedes provide very good CPO programs… that are as pricey as can be in this market. With

My advice would be to go the private owner route. Or at least opt for a car that you can track down the history to the nth degree. When it comes to even near-new cars, Germans tend to be the least able to take abuse. I would sooner shop for a Cobalt or Neon with an unknown history than I would any German car.

Forget the CPO and start with the owner. If you do decide to buy German, I would look locally or even try the Ebay route… and find a very good independent shop that specializes in the brand. You will likely save $5,000+ in the purchase price without an inherited headache. Good luck!

Sajeev answers:

For a short term (less than 5 year) relationship in German sedan love, CPO is the way to go: all of the pleasure, none of the pain. Even if your BMW/Benz goes in on multiple occasions for a singular problem (often the nature of the beast) you rest easy in a gorgeous service lounge, enjoy a free loaner car and generally get the feeling that the dealer will feed you grapes, fan you and powder your ass with the snap of a finger. Wait…that’s more like the “spa” treatment available at this Lexus dealer. So let’s get to your questions.

Question 1: A couple of my friends were royally peeved with the quality and “frequent” visits to both BMW and Mercedes service departments, no matter how convenient their loaner car program. They value their time more than most, expecting a stereotypical Honda/Toyota ownership experience with the trappings of the German luxury sedan. Since that rarely happens, I told at least one of them to consider buying a Lexus, as their service reputations are rather bulletproof.

Question 2: CPO cars can be purchased at auction, with an added fee for re-conditioning, re-filling the warranty, and re-filling the coffers of the dealership, manufacturer and (sometimes) their captive finance arm. But the days of sweet financing on CPO vehicles are probably gone. Therefore you negotiate just like any other vehicle. It’s all flexible, considering the transaction prices at the auctions. Don’t be shy, do it.

Question 3: consider a Lexus IS, with the full CPO treatment. I’m not saying it’s a better car than the BMW or Mercedes, I’m just saying the warranty, service reputation and disturbingly loyal client base is worth your time for a test drive. Think about it.

Need help with a car buying conundrum? Email your particulars to mehta@ttac.com, and let TTAC’s collective wisdom make the decision easier… or possibly much, much harder. In a rush? Don’t be shy about asking to cut in line.