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Are You in the Market for a Certified Car?

  Norman Taylor & Associates
  December 11, 2008

Getting halves of two cars was not what Paulette Day expected when she bought a red 2004 Chevrolet Monte Carlo that year from a dealership near Detroit for $22,000. The car was used, but it was a “G.M. certified” car, meaning it had supposedly passed a rigorous inspection by the dealer. As General Motors says in its marketing material, buying a certified car means “the reliability of new and the affordability of used.” Not in this case. Ms. Day said she became suspicious about the car after noticing the paint did not match. After a mechanic put the car on a lift and saw the welds, Ms. Day learned that it included pieces from the front of one Monte Carlo and the rear of another, both seriously damaged in crashes. “I thought being certified, there are supposed to be so many checkpoints to make sure the car is safe,” she said. “I think they skipped over all of it. They would have had to notice that.”

Certified used cars have become popular over the last five years, favored by consumers worried about getting a lemon when they buy used. A guarantee from an automaker that the car checks out is peace of mind for which an increasing number of people are willing to pay extra, sometimes $2,000 or more. But some consumers are finding that certified does not protect them and some, like Ms. Day, are filing lawsuits. Robert Minton, a G.M. spokesman, said the automaker would not comment on Ms. Day’s case. Three telephone calls to the dealership, Rowan Pontiac GMC in Southgate, Mich., were not returned.

Automakers said buying a certified vehicle was the next best thing to buying new and that, in general, customers have been pleased with the programs. Indeed, most consumers who buy vehicles certified by automakers say they are substantially more satisfied with their vehicles than those who bought comparable used vehicles, said Art Spinella, president of CNW Marketing Research, a firm in Bandon, Ore., that studies buying habits. Certified vehicles “pretty much matched the satisfaction numbers you see from new cars,” he said. Last year, new-car dealers sold about six million used vehicles that were one to four years old. About 1.7 million of those vehicles were certified, he said.

Automakers said that more than 100 items were inspected before a vehicle could be certified. Many involve major mechanical components and the frame. However, some of the inspection items are insignificant, like checking windshield-washer fluid, said Jack Gillis, director of public affairs for the Consumer Federation of America.

If problems were found, the automakers said they had to be fixed for the vehicle to be listed as certified. Certification programs, which vary from automaker to automaker, usually cover current models and the previous four or five model years. Vehicles must have relatively low mileage, often less than 60,000 miles.

The automakers’ provide inspection guidelines and the extended warranty that comes with the certification, for which they charge the dealer several hundred dollars. The dealers conduct the actual inspections and decide how much more to charge the buyer for a certified vehicle. On average, a certified used car costs about $2,200 more than one that is not certified, CNW found. One problem for consumers is that there are no industry standards to define what certified means. Anyone from a major new-car dealer to the owner of a small used-car lot can say a vehicle is certified. Also, most automakers allow vehicles that have been in crashes to be certified if the damage was properly repaired and did not involve damage to the frame.

“So long as the damage has been repaired, most vehicles can be certified,” said Virginia Y. Calderón, a San Diego lawyer who often handles complaints about certified cars. “You always have to be concerned about that.” In some lawsuits automakers have denied responsibility by saying the dealer — not the automaker — certified the vehicle. The only guarantee with a certified used vehicle is that the dealer and the automaker make more money, Cliff Weathers, deputy editor for autos at Consumer Reports , said. With relatively new vehicles in particular, certification makes little sense because they are likely to be relatively trouble-free anyway, he said.

Calling a used vehicle certified suggests it is better, but there is no way a consumer can be sure, said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a California-based advocacy group.

Ms. Shahan lobbied the California legislature to enact a Car Buyer’s Bill of Rights, which took effect last year. It includes a certified used-car section that prohibits automakers from certifying a vehicle with frame damage. “There are some problems with the manufacturer programs where they have been lax,” Ms. Shahan said. She also said that because the dealer paid the expense of any repairs, there was a built-in conflict of interest not to make them, Ms. Shahan said. It is a system that depends heavily on the honesty and diligence of the dealer. Automakers said good dealers saw the value of the program and would not abuse it.

“Ultimately, the dealer is our eyes,” said Larry Pryg, advertising and marketing manager for G.M. Certified Used Vehicles. In Ms. Day’s case that system failed, said Dani K. Liblang, a Birmingham, Mich., lawyer representing Ms. Day. It is hard to imagine how mechanics at Rowan Pontiac GMC could not have known that the Monte Carlo was two vehicles, Ms. Liblang said. “It took our expert less than five minutes to figure out that this vehicle was two vehicles welded together with two different vehicle identification numbers,” she said.

Auto company officials in charge of the certified programs said they ensured that the inspections were done correctly and that only the best used vehicles were certified. They conduct audits at the dealerships by inspecting some vehicles themselves. But many automakers warn the dealers in advance, with Toyota being an exception.

Automakers said they also checked the paperwork of vehicles the dealers wished to certify. That includes looking at Carfax vehicle history reports to see if the vehicle was in a major accident or had flood damage. But that still leaves consumers vulnerable because even major problems may not show up on Carfax, Ms. Liblang said. A Carfax inquiry run in April on the vehicle identification number for the front of Ms. Day’s Monte Carlo showed no problems. Ms. Shahan of the California consumers’ group said that buying a certified used vehicle was a waste of money and suggested that consumers use a different strategy.

“Basically you are paying a lot to have somebody else to do an inspection,” she said. “Instead, spend $100 or $200 and get your own inspection done.”

Auto company officials responded that few consumers have the time or knowledge to find a competent mechanic familiar with the particular model. In addition, certified vehicles come with factory warranties. Ms. Day, who still has her Monte Carlo, had some advice for those who find certified used vehicles alluring. “Whether they say it is certified or not,” she said, “take it somewhere and have it checked because you never know what you are getting.”

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