A comprehensive guide to certified pre-owned vehicle programs

Kim and I have been talking a lot about cars during the past few months.

She drives a 1996 Honda Accord with 226,000 miles on it. The car runs fine and has served her well, but she’s begun to think about the possibility of upgrading.

I still drive my beloved 2004 Mini Cooper, but the little guy has had some issues lately. (Right now, it’s in the shop because the clutch burned out. In the process of replacing that, the mechanic discovered that the transmission needed to be replaced — thanks to towing the car behind our RV for 15 months.)

To top it all off, since we moved to our new place in July, we’ve come to the realization that we might need a cheap compact pickup truck. (If we bought one, we’d buy a beater.)

Neither one of us is ready to make a move yet. We both believe that you should drive a car until it dies. (Although once I get the bill for the repairs to my Mini, I may be singing a different tune.) Still, it doesn’t hurt to gather resources while we wait.

Earlier this week, for instance, Automotive News released a comprehensive Guide to Certified Pre-Owned Vehicle Programs. This 12-page PDF [1.7mb] includes a run-down of dealer fees, the types of vehicles that qualify, and — most importantly — warranty details.

Preowned Mini Program Details

I have mixed feelings (and experiences) about buying a used car from a dealership. Buying a certified pre-owned vehicle would allay some of my concerns.

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There are 12 comments to "A comprehensive guide to certified pre-owned vehicle programs".

  1. MC says 14 November 2017 at 14:29

    Needing significant repairs like transmission and clutch qualify as “dead”. If it would cost more to repair than you could buy it for it might be time to let it go with no regrets.

    • lmoot says 14 November 2017 at 16:41

      See I’ve never understood this concept that you shouldn’t pay more than what you would buy the car for. For most people, if the fix is part of regular scheduled maintenance, it will almost always be cheaper to fix than buying a newer or different car. At least you (presumably) know the history of the car and by the time you’ve gotten to the point where maintenance costs more than the value of the car, you’ ve already replaced most of the major parts and should be good to go (and might still be under warranty on the replaced parts) for a few years or miles.

      Of course there are exceptions to the rule. But I often hear this stated as if it is the rule. My Accord is 15 years old, and I’ve had it for eight years. Only has 150K miles and I’m planning on driving it to 250K, so I’ve been doing regular maintenance on it Some years are more expensive than others. I spent about $250 this year on it but last year I spent $2000 replacing belts. I guarantee you that $2000 wouldn’t have gotten me another reliable car, who’s history I knew, with verifiably recently replaced parts. And it would barely be a down payment on a new car. Not to mention the fees/taxes.

      Not saying no one should ever replace their car. Not at all. But don’t use this arbitrary calculation (don’t spend more on maintenance than the car is worth) as an excuse.

      In fact I plan on investing a couple thousand on my car in the next year or two, for cosmetic work (birthday present to myself bc I am tired of driving a janky looking car in my 30’s). People may question why I don’t just buy a new car, well I kind of did with replacing all of the major parts. If I plan on keeping it for another hundred thousand miles, then why wouldn’t I want to be (even happier) with it. Doing this makeover is the only thing that will keep my new car itch at bay; it’s a compromise.

      • Kevin says 21 November 2017 at 10:36

        Except there are literally dozens of “major parts” that people forget about when it comes to modern cars which rapidly add up to more than the cost of a replacement vehicle.

        For example the driveline of your standard modern mid-sized car has the following disparate components all of which can cost more than $1000 to repair or replace:
        Drive Axels
        Transmission internal gear changing system
        Engine Lower (Block and accesseries)
        Engine Upper (Heads, cams, valves)
        Fuel Delivery system (Older cars its super simple and cheap, new DI systems run at much higher pressure and require complicated engine management)
        Cooling system
        Forced Induction components

        If you replace 3 of these things you might think “I have a new car” for another completely different part to fail that has been wearing this entire time.

        Its foolish unless you have a very intimate knowledge of your cars obselescence schedule (when the parts are designed to fail at) to presume you are “covered” by replacing only a few parts.

        Mini’s however should just be replaced after transmission problems because the intake and motor also starts to go after that and that’s before you end up with motor mount fatigue and the very pricey suspension failures.

  2. lmoot says 15 November 2017 at 00:48

    Also personally JD, I’d like to see you keep the Mini Cooper, if only symbolically, and not to actually use. Silly, I know, but it’s such an important relic of your journey. Plus I’m a sentimental boob.

    Or at least keep a nice enlarged framed photo print of it. I guess that would work too 🙂

  3. Tired Scientist says 16 November 2017 at 07:31

    This is one question I’d like to see J.D. address. Exactly what is the definition of “until it dies”? My husband and I have gone around and around on this question ourselves. We both believe in driving a car “until it dies”, but disagree slightly on the definition of this–because, unlike with the human body, almost all problems on a car are fixable given enough money.

    As an example, until 3 years ago, we had a 1991 Nissan NX1600 that was anyone’s definition of a “beater”. I drove it every day to work. We spent an average of $100/month in repairs and maintenance on this car. The car probably wasn’t worth the amount of a single month’s maintenance. The steering wheel was literally disintegrating in my hands every day–a portion of it was bare metal. The driver’s side window was permanently stuck shut, and there was no A/C (so rolling the window down to compensate wasn’t an option). Safety was also a concern, since many advances in passenger safety have been made since 1991!. I was getting fed up, but my husband maintained that it was still cheaper to repair the car than it would be to have a car payment (we are paying down debt still and could not pay cash for an upgrade). Then, my hair started falling out. Eventually I noticed a smell of exhaust in the car (my sense of smell is horrible, my husband said the smell was overpowering when he checked). I brought in my carbon monoxide detector and discovered that the levels in the car were toxic. That’s why my hair had been falling out. That was the last straw for the husband, and he looked for a newer car that same day. We are financing a 2010 Prius, which should give us many years of peace from the mechanic once paid off.

    Our other car was a 1995 Honda Accord, which is what I now drive to work every day (the replacement for the Nissan went to my husband since he transports the kids most of the time). We have repaired the transmission, but otherwise the maintenance hasn’t gotten too horrible on this car yet. However, I am apprehensive (PTSD?) based on my experience with the Nissan (trying to kill me). So, I’m thinking hard about this question.

    I’d like to know. When is a car considered “dead”? When the cost of repairs exceed the value of the car? When the average monthly cost of repairs exceeds the amount a car payment would be? Is my husband right, and the car is “dead” once it tries to make you dead?

    • Daniel Winegarden says 16 November 2017 at 08:05

      I’m willing to make larger investments in repairs in a car I for which I know the maintenance history. But a major engine rebuild or frame/unibody damage are normally out of the question. It’s dead. You can buy more reliability, safety, and other improvements by investing the same amount in the next used car. Our rule is buy used and drive long. We drive them into the ground or pass them down within the family. One other dead trigger? Electrical issues can be notoriously hard to diagnose and fix — just so much to disassemble to get at major wiring harnesses. Haven’t had this happen to us, but have heard horror stories. Cosmetics? It’s still alive.

  4. Daniel Winegarden says 16 November 2017 at 07:55

    At CCRC LifeCast — Aging with Freedom, we’re cheap car fanatics as an important contributor to wealth building. One of our rules? No car is good enough to overcome a bad dealer or buying experience. It’s as important to research the seller as the car. Our cheap car fanatic rules are here: http://bit.ly/2zLooga They helped us get over the debt-free million mark on average income.

  5. Aaron says 16 November 2017 at 12:26

    Can you expand on how towing a car behind an RV can cause this transmission to wear out? I would think the transmission would be disengaged the whole time wouldn’t it?

    • J.D. says 16 November 2017 at 12:50

      Because I’m not a car guy, I can’t explain the exact issue. Having said that, it’s apparently a thing. Even if your towing a car with a manual transmission and you have the car in neutral, you’re still placing stress on the transmission. Here’s one explanation by a towing company. Bottom line: Towing the Mini for 18,000 miles (sometimes for several hours at a time) placed stress on the transmission.

  6. Commercial Loan Officer says 16 November 2017 at 12:32

    There are 2 reasons I justify purchasing a newer vehicle instead of repairing existing one: environmental and safety. If safety features were the same in old vehicles as in new, I would be cruising around in an old classic (which may even appreciate in value after the repairs).

    It would be interesting to see the difference in crash test video between 1996 and 2016 Honda Accord.

    Environmental benefit is there as well, but slightly muted. While the new engine may be more efficient, it takes a while to offset damage done by production of an entirely new vehicle.

  7. Tim says 16 November 2017 at 12:58

    Man wouldn’t it be cool if you lived in a place that you only needed one car.

  8. Freedom says 27 November 2018 at 19:17

    Drive it until it dies….Period

    Only the idea to buy a car is too tempting for many people (that’s why people spend tons of money in useless metal boxes.

    If the car is really dead just fix a budget of 9K$ MAX…the sweet spot to buy something decent that you can drive for next 15-20y

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