Kelley Helping Credit Challenged Used Car Buyers

 

 

For more than two years consumers with bad credit have been helped by the Kelley Blue Book certified used car section on its web site

Helping consumers

At Auto Credit Express our job, for more than two decades, has been to help consumers with credit issues find the car dealer that can give them their best chance at an auto loan approval. At the same time, we try to educate them on the subprime auto loans process, which includes picking the right vehicle.

It begins with reliability

Most credit-challenged consumers decide that it’s more affordable to finance a 2 or 3-year-old used car. Taking into consideration new car depreciation and the current level of vehicle quality, this makes a lot of sense.

Now those same car buyers are faced with another decision: should they buy a regular used car or a certified used car?

Certified used cars

Most certified used car programs (known as CPO or Certified Pre Owned) work this way: if a vehicle meets certain age and mileage requirements, it’s eligible to go through an inspection process. Following the required replacement of worn, broken or defective parts, franchised new car dealers can then sell them with a manufacturer-backed extended warranty (in reality a service contract).

Because of the added costs, these certified used cars are then sold at a premium over typical non-certified used cars.

Kelley Blue Book

Because this peace of mind comes at a price, shopping for a certified used car often comes down to affordability. Up until May of 2010, it was very difficult to determine a competitive price for a manufacturer-backed certified used car since the used car values listed in both NADA and Kelley Blue Book were based regular used cars. But it all changed that month when visitors to kbb.com were able to determine the value of a certified used car.

According to Kelley, certified used car values are calculated in the same way that the value of a conventional used car is determined, while also factoring in the “value that is associated with the certified used program.”

This is not as easy as it looks, because the certified used car programs for each manufacturer vary greatly. This also means that the differences between a regular used vehicle and a CPO vehicle also vary by manufacturer, since some offer longer warranties and more additional services (such as rental cars) than others.

This means that comparing a Chevrolet certified used car to another certified used Chevy is easier than comparing a Chevrolet certified used car to a Ford certified used car. To help solve this dilemma, Kelley also has a page where you can list four different manufacturers programs, side-by-side, to directly compare their various features.

Backed by the manufacturer

“Many car shoppers have heard the term ‘certified’ but they aren’t sure exactly what that means, let alone if it is right for them or what they should be paying for a CPO vehicle,” said James Bell, executive market analyst for Kelley Blue Book. “The CPO section on kbb.com and Kelley Blue Book’s CPO Value take the mystery out of CPO and provide shoppers with all of the tools and advice they need to research and purchase a CPO car.”

Keep in mind that these programs are certified by their respective manufacturers. Unfortunately, just because a dealer advertises a car as certified doesn’t necessarily mean it has to be part of a manufacturer-backed program.

If not, you may be required to pay for any repairs up front and submit the receipts to an outside warranty company for reimbursement – a process that can be a hassle.

The Bottom Line

Certified used cars are typically more expensive than their non-certified counterparts. The costs of an inspection, warn and/or defective parts replacement and a fairly comprehensive service contract all add to the price. Before buying one, it makes sense for buyers with credit problems to do some research and compare the selling prices of both certified pre-owned vehicles and their non-CPO counterparts (priced with a comparable warranty from a reputable warranty company).

One more thing: if your car credit is less than perfect, Auto Credit Express can help you find a dealer for your best chance at an auto loan approval.

If you’re ready to start rebuilding your auto credit, you can begin now by filling out our online car loans application.