Certified used cars still have their risks

The rise in sales of “certified” used cars has brought about charges of fraud and misrepresentation by sellers. Here’s what you should know.

More below.

Certified used cars are a good idea, but buyers should be careful

The price of a new car has been steadily rising for the last forty years or so. Inflation accounts for part of the increases, but so do improvements in performance, comfort and safety. Still, many people cannot afford to purchase a new car, which can easily cost a year’s pay for a lot of consumers. The alternative is to buy a used car, and doing so always comes with risks. If the car is such a great vehicle, then why didn’t the original owner keep it? The buyer then has to assume that the vehicle must have some problem with it, or it wouldn’t be for sale in the first place.

In order to calm the fears of consumers and to keep up competitively with companies such as Carmax, the major auto manufacturers introduced the idea of the “certified” used car a few years ago. These cars are ostensibly given thorough examinations for defects, given repairs if necessary, “certified” to be quality vehicles, and packaged for sale with a warranty that’s better than what one usually gets with a used car. That has helped the auto manufacturers clear their inventories of rental car fleets and it has helped local dealers clear their lots of run of the mill used cars. Unfortunately, whenever a good and profitable business turns up, some unscrupulous people find a way to profit from it. And now, stories are popping up about “certified” used cars that may have been misrepresented.

The certification process is good for dealers, as the extra warranty and peace of mind that it offers customers allows them to charge more for a used vehicle than they might charge for a noncertified model. This extra profit potential has led to the certification of cars that probably shouldn’t be certified. Some states, such as Pennsylvania, have vehicle laws regarding what may and may not be sold as a used car. Some types of damage, such as flood or frame damage, automatically prohibits a vehicle from being sold in that state. And yet, reports have surfaced of cars with such damage being sold in various states as “certified” cars when they probably shouldn’t be sold as certified and perhaps shouldn’t be sold at all.

In addition, dealers pay a fee to the manufacturers, who “certify” the vehicle and offer the warranty. There have been reported cases of vehicles sold as certified that actually weren’t, as the dealer never paid the fee to the manufacturer. Such certifications are fraudulent, and worthless to the buyer.

There are several lawsuits being pursued in California regarding such problems, which are not covered under the California lemon law. Similar lawsuits will undoubtedly follow in other states shortly. The biggest problem is that there is no national standard or Federal law regarding the designation and sale of certified used cars. Until such laws or standards are created, there is nothing to prevent anyone from presenting a car for sale as certified, even if the claim is completely false.

Buyers are encouraged to exercise the same cautions when buying a certified used car as they would any other used car. Buyer beware.

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