Honda, GM Cracking Down On Non-Compliant CPO Programs

by Cameron Aubernon

September 23rd, 2014 7:34 AM

honda gm cracking down on non compliant cpo programs

Honda and General Motors dealers beware: If you’re not strictly adhering to the rules laid out by the certified pre-owned overlords, you might find yourself suspended until conditions improve.

Automotive News reports Honda CPO manager Brian Butts and GM CPO chief Larry Pryg both said most of the dealerships under their watch properly administer their respective programs, but those who do not are temporarily suspended.

For Honda, those suspensions are part of why CPO sales are down in 2014; production cuts — and the subsequent low off-lease volumes — following the 2011 Tōhoku earthquake and tsunami account for the rest of the missing sales. Sales dropped 7 percent in comparison to 2013 to 186,248 units.

Meanwhile, GM’s program saw a 10 percent increase in sales through August compared to last year, with 255,077 units leaving the used lot.

As for how those programs are monitored, Honda uses third-party companies to certify compliance, while GM Certified sends out its own reps to visit dealerships one to four times annually; those who comply receive fewer visits.

Honda’s program, which is undergoing a makeover as of this writing, requires non-compliant dealers to submit a plan and work with field staff to be able to sell CPO vehicles again after the 90-day suspension is lifted. GM also removes non-compliant dealers from the program, though no length of time was stated by Pryg.

#CertifiedPreOwned #Compliance #Dealerships #GeneralMotors #Honda

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13 of 38 comments

Zip89123 on Sep 23, 2014

Hey GM, Kuni Chevrolet would be a good place to start. Signed, a former GM owner.

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Kendahl on Sep 23, 2014

CPO implies that a competent mechanic has performed a detailed inspection of the vehicle and repaired everything that was bad or even close to bad. According to my trustworthy independent mechanic, the inspection is often cursory and repairs are limited to what has already failed. Post sale failures that should have been caught during the inspection are fixed under the extended warranty that is usually part of the CPO program. Done that way, a CPO vehicle is just another used car with an extended warranty you bought by paying a higher purchase price.

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Mikey on Sep 23, 2014

Last winter I made a complicated deal involving two trade ins. I was happy with the offer on the truck. It was my 2011 2SS Camaro with 9000 KLM's {less than 6000 miles}, that was the sticking point. We were 500 dollars apart. The used car guy said "we have to do a multi point check on the Camaro before we can sell it" I called B.S. I said to the dude "you and I both know that when the Camaro comes out of my garage it goes straight to the front row of your used car lot". Two days of haggling later , we split the difference. I drove the Camaro to their lot, it was on the front row that afternoon.

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- Kyree on Sep 23, 2014
  
  Interesting. And so true. Just out of curiosity, for what car did you trade?
  
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- Mikey on Sep 23, 2014
  
  Kyree....2014 Impala LT
  
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Redliner on Sep 23, 2014

Reminds me of when I recently went to a local Toyota dealership to look at a low mile CPO car. When I got there, the pictures did not match the ones listed online, and the car had major body damage on the passenger side. The salesman said, "oh, don't worry, it's CPO, so after it comes out of the body shop it will have a great warranty." I couldn't believe they expected me to buy a "CPO" car that literally had thousands of dollars in body damage.

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- Kyree on Sep 23, 2014
  
  What disturbs me is that for every one of "us" who would be able to recognize and call out a dealership on a certain ploy or scam, there are twenty other people who are going to get utterly fleeced for the same thing, conned out of thousands of dollars. It's disgusting.
  
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- CaptainObvious on Sep 23, 2014
  
  @Kyree Yes it is. When I took the supposedly "certified" Mazda6 for a test drive I immediately noticed a vibration in the front end - probably just the tires needed to be rebalanced - when I mentioned it to the sales guy sitting next to me he said no way - the tires were new - and this stretch of road is just "wavy". Well - I've been driving that road for more than 30 years in numerous cars and it's not wavy and I told him so. BUT - How many people would just accept this statement as truth?
  
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- Highdesertcat on Sep 23, 2014
  
  @CaptainObvious There's an old axiom popular with dealers when taking in trades and that is, "if it ain't broke, don't fock with it!" The dealers have a detail crew to spruce up the looks and appeal of the car taken in, and they may even pop four new cheap tires on it, but "certification" is an urban myth. No new timing belt. No new Serpentine belt. Maybe an oil and filters change. Maybe topping off all fluids. But nothing that's going to cost the dealership real money, if it doesn't need it right then and there. When you buy that "certified pre-owned" vehicle you buy the certification that someone else previously owned it before you, and the extended warranty that's folded into the transaction price, just in case something should break.
  
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- Snakebit on Sep 23, 2014
  
  Kyree, think about it. This is the internet age. Wouldn't we hope that a buyer would do their research thoroughly via the web. What excuse does any car buyer have for failing to get the information they need to be educated about what to expect when buying a car? None, when they have a smart phone in their pocket, a Mac or PC at work, and maybe a laptop or tablet at home. It's like someone taking the dealers word for something, not getting it in writing, and then getting angry when the dealer doesn't come through, or denying that he promised you something. How many more decades will it take for a buyer to "get it in writing" first? Dealers are business people. They're not your favorite nextdoor neighbor, they're not saints, they're not your best friend, their not family. If you're pretending that they are any of these people, as Cher said, 'snap out of it'. Buying a used car with a factory-administered extended warranty and under a factory-administered certified preowned program is generally a good deal for the public, I think, because it enables a buyer to afford a better model, while not the very latest one, for less money overall. And when the buyer perceives a problem, they have the weight of the factory, in the person of a consumer relations rep who themselves represent the car owner in negotiations against the dealer. This is why I keep saying that there is no reasonable thing as a dealer-administered preowned program. You always need written proof that the CPO-backed car you buy is one supported by the manufacturer.
  
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- MBella on Sep 23, 2014
  
  @highdesertcat As I've said before, I can't talk about other manufacturers' CPO programs, but a Mercedes CPO is very strict. We usually have to replace the tires with Mercedes approved versions. (The dealer can't just put some GT Radials on it and call it good) The brakes have to be good. Every problem is required to be resolved. No body damage. They do spend a good chunk of money on most CPO cars.
  
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- Highdesertcat on Sep 23, 2014
  
  @highdesertcat MBella, I do not believe that the lesser brands hold themselves to the CPO standards of Mercedes, BMW or Lexus. Those are brands with cachet whose quality has endured over time and whose reputation has been established, and is worthy of protecting. The level of expectation is higher with those brands. When buying a CPO vehicle from Mercedes, BMW or Lexus the buyer generally gets a completely refurbished or reconditioned automobile. The lesser brands saw this sales-success as an opportunity to sell their used cars for a higher price but did little in return to refurbish the cars except maybe do a cursory once-over safety inspection. It's easy to sell a used car as having been re-certified to be as-new and then furnish the buyer with an extended warranty, the cost of which has been folded into the transaction price, and the buyer pays for. And that could be the reason why several states are trying to enact legislation that makes it unlawful to sell any used vehicle until all recalls have been addressed and corrected, if need be.
  
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- Snakebit on Sep 24, 2014
  
  @highdesertcat Like MBella has posted for MB, my experience with Acura is similar. Tires that need replacement demand OEM Michelins or their current Michelin equivalent, because no car will be considered for CPO program if it has 100,000 or more miles things like timing belts are inspected but usually not replaced routinely, mainly because it's typical that the car under CPO consideration has in the range of 40,000 to 70,000 miles and the suggested change interval is 90,000 miles. Doing an oil and filter change IS done routinely. A note about T belts and some Acuras. The manufacturer was gradually going back to using timing chains on cars like TSX and RSX rather than rubber timing belts.
  
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